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78TH CONGRESS) HOUSE OF REPRESENTATIVES

2d Session

}

{ No: 1979

STIERS BROS. CONSTRUCTION CO.

May 22, 1944.-Committed to the Committee of the Whole House and ordered

to be printed

Mr. FERNANDEZ, from the Committee on Claims, submitted the

following

REPORT

(To accompany H. R. 4107]

The Committee on Claims, to whom was referred the bill (H. R. 4107) for the relief of the Stiers Bros. Construction Co., having considered the same, report favorably thereon with an amendment and recommend that the bill as amended do pass.

The amendment is as follows:

Page 1, line 8, strike out the words "the claim" and insert in lieu thereof "all claims".

The purpose of the proposed legislation is to appropriate the sum of $500 to the Stiers Bros. Construction Co., of St. Louis, Mo., in full settlement of all claims against the District of Columbia for furnishing and installing for the District of Columbia one backwater gate at the unit price of $500 named in its bid and under its contract No. 13722. dated September 15, 1939, with the District of Columbia, and for which no payment has ever been made.

STATEMENT OF FACTS

From the evidence submitted it appears that this company entered into a contract with the District of Columbia for the construction of two backwater gates at a cost of $500 each or a total cost of $1,000. Inadvertently, due to the improper placing of the figure $500 on the form furnished the contractor by the District of Columbia, known as schedule of prices, it was interpreted as the price of the two gates. The District of Columbia requested the contractors to use this schedule in making their bids.

This schedule called for furnishing and installing two backwater gates with appurtenances in the west side diversion sewer. On this schedule there is a line for the amount and under that there is a space for a figure with the words underneath "lump sum.” In the submission of this schedule or bid the contractor erroneously put $500

opposite the words "lump sum” in the unit price column, and then put $1,000 in the last column on the page headed “amount.” When the bids were opened, despite the fact that it was apparent on the face that the company had bid $500 for each gate and that they were making a bid of $1,000 and not $500 for the two gates, the contract was interpreted as being $500 for the two gates and it was so held by the Comptroller General.

The Stiers Bros. bid totaled the sum of $801,620 which did not include the other $500, and in fact covered only one backwater gate. The contractor, however, signed the contract for a total amount. In a report from the government of the District of Columbia, dated March 13, 1944, they state:

The sum of $500 specified in this bill represents the price which Stiers Bros. Construction Co. claims it intended to bid as a unit price for one backwater gate, but which amount was entered by it on the bid sheet in such fashion that it was interpreted as a lump-sum bid for furnishing two backwater gates. Although it appeared to the Acting Chairman of the Contract Board, District of Columbia, at the time bids were opened, that an error had been made and that Stiers Bros. had intended to bid $1,000 for the two gates, nevertheless the bid was otherwise interpreted and the award made and the formal contract signed by Stiers Bros. on the basis of a lump sum of $500 for furnishing both gates. In returning the formal contracts to the District, Stiers Bros. wrote that it signed the contracts with full knowledge of the ruling of the District on that item.

From the evidence submitted it appears that without a question of doubt the contracting board of the District of Columbia had knowledge of the unit price of $500 per gate. It also seems that general understanding of all concerned this unit price was the basis in the total bid in this instance, which was $1,000.

Therefore, it is the opinion of your committee that the bill be favorably considered with amendment. Appended hereto is the report of the District of Columbia, together with other pertinent evidence.

GOVERNMENT OF THE DISTRICT OF COLUMBIA,

Washington, March 13, 1944. Hon. Dan R. McGEHEE, Chairman, Committee on Claims,

United States House of Representatives, Washington, D. C. MY DEAR MR. McGEHEE: The Commissioners have for report H. R. 4107. Seventy-eighth Congress, second session, entitled “A bill for the relief of the Stiers Bros. Construction Co."

The sum of $500 specified in this bill represents the price which Stiers Bros. Construction Co. claims it intended to bid as a unit price for one backwater gate, but which amount was entered by it on the bid sheet in such fashion that it was interpreted as a lump-sum bid for furnishing two backwater gates. Although it appeared to the Acting Chairman of the Contract Board, District of Columbia, at the time bids were opened, that an error had been made and that Stiers Bros. had intended to bid $1,000 for the two gates, nevertheless the bid was otherwise interpreted and the award made and the formal contract signed by Stiers Bros. on the basis of a lump sum of $500 for furnishing both gates. In returning the formal contracts to the District, Stiers Bros. wrote that it signed the contracts with full knowledge of the ruling of the District on that item.

Thereafter, at the contractor's request, the matter was referred to the Comptroller General of the United States who ruled, under date of January 8, 1940, that the amount of $500 stated in the contract could not be modified to read $1,000. On May 10, 1943, the Commissioners requested the Comptroller General to reconsider his prior decision, pointing out certain facts omitted from the earlier submission, but the Comptroller General on May 28, 1943, affirmed his first ruling. A copy of the letter of the Comptroller General of May 28, 1943, which is selfexplanatory, is attached hereto and made a part of this report.

During the time that the contractor's claims for compensation for items which had been omitted from his final payment were under consideration by the Commissioners, the contractor filed against the District of Columbia civil action No. 16602 in the United States District Court for the District of Columbia. Among the items in suit was the claim for $500 for this backwater gate. On June 15, 1943, judgment was entered in the civil action against the District of Columbia in the amount of $2.536.86, which judgment is final and has been paid pursuant to appropriations of the Congress.

In view of the fact that the Comptroller General of the United States has twice ruled that Stiers Bros. Construction Co. is not entitled to payment of the $500 which is the subject of this bill, said rulings being based upon applicable decisions of the Supreme Court of the United States and of the United States Court of Appeals for the District of Columbia, and of the further fact that this same claim for $500 was a part of the subject matter of a civil action in the United States District Court for the District of Columbia in which a final judgment was rendered, the Commissioners recommend that the bill do not pass.

The bill and report thereon have been submitted to the Bureau of the Budget, and the Director of the Budget advises that there is no objection on the part of that office to the submission of this report to the Congress. Respectfully,

GUY MASON, Acting President, Board of Commissioners, D. of C.

COMPTROLLER GENERAL OF THE UNITED STATES,

Washington, May 28, 1943 PRESIDENT,

Board of Commissioners, District of Columbia.
MY DEAR MR. Young: I have your letter of May 10, 1943, as follows:

“Inviting attention to your decision (B-7687), of January 8, 1940, advising us that there is no authority for modification of the amount of $500 stipulated in the contract as payment for the work under item 20-A,' of contract No. 13722, with Stiers Bros. Construction Co., dated September 15, 1939, for the construction of the Rock Creek Diversion Sewer, west side (PWA project District of Columbia 1025-F, unit 6).

“The work under this contract has been completed and final payment voucher executed by the contractor with reservation of certain claims, one of which is for $500 under item 20-A of the contract. The various claims made by the contractor are now under consideration by the Corporation Counsel but review by you is requested of your ruling of January 8, 1940, in the light of facts which were not incorporated in our letter to you of December 15, 1939.

“In your opinion (p. 4, par. 2) you state ‘it does not appear that any discrepancy in the bid was noted by the representatives of the District of Columbia until after award.' The records of the District of Columbia reveal that the discrepancy was noted immediately upon the opening of bids. A memorandum dated August 19, 1939, addressed to the Chief Clerk, Engineer Department, by Harold A. Kemp, Chief Engineer, Department of Sanitary Engineering, states:

“I am returning herewith bids for the Rock Creek Diversion Sewers, West Side, which were opened August 18, 1939.

''Several changes have been noted, in red, in the extensions of unit prices and totals. 'I would appreciate receiving six copies of the photostated schedule of bids for our office. (Italics supplied.)

“The schedule of bids and the bids themselves were forwarded to the Commissioners with endorsement dated August 24, 1939, which, insofar as it is material, stated ‘Bid of Stiers Bros. Construction Co. (as corrected) $801,120.' The award was made by the Board of Commissioners August 25, 1939. Thereafter the following memoranda appear:

"AUGUST 30, 1939. "To the DIRECTOR OF SANITARY ENGINEERING:

“There is forwarded herewith for examination by you, form of contract for construction of West Side, Rock Creek Diversion Sewers.

“ 'If same is satisfactory, will you please initial contract in the upper left hand corner on page No. 16, where marked.

“ 'Your attention is called at this time to item 20A. This item calls for a lumpsum bid, but it appears that the bidder was confused and gave a unit price of $500, with a total of $1,000.

“'If this interpretation of the bid is not correct according to your views, will you please advise this office.

" "W. N. HANDIBOE, Acting Chairman, Contract Board, District of Columbia.'

(First endorsement)

« AUGUST 31, 1939. “" To the CHAIRMAN, CONTRACT BOARD:

As noted in the basic recommendations of award, the total amount of the bid, as accepted, was $801,120. It is believed that item 20A lump-sum bid must stand at $500. The extension in the second column should be correctedaccordingly prior to execution.

" " D. G. SHINGLER, Captain, Corps of Engineers, United States Army,

Acting, Director of Sanitary Engineering.'

[Second endorsement] "Schedule of prices, item 20A (p. 17f), corrected to read “$500.” Bidder's figur in the copy of bid attached has not been changed because Public Works Administration expects us to incorporate in the contract an exact copy of the original bid.

"W. N. H.'

'In any

*

"In your ruling of January 8, 1940 (p. 4, par. 3), you further state: event, the contractor voluntarily entered into the formal contract of September 15, 1939, which carries provisions for compensation in the lump sum of $500 under item 20A and in the reduced amount of $801,120 for the entire contract work Your attention is called to the following memoranda (italic supplied]: .

“ 'NOVEMBER 27, 1939. " "To the DIRECTOR OF SANITARY ENGINEERING: “ 'Subject: Error in bid and contract claimed by Stiers Bros. Construction Co.

" "When bids were received for the construction of the west side diversion sewer, it was observed that Stiers Bros. Construction Co. had inserted for the lump-sum bid, under item 20A for furnishing and installing two gates, the amount of $500, and extended this amount of $500 to the "Unit price” column. In the “Total amount" column they had inserted $1,000.

“ 'Since the unit-price, which was a lump-sum bid, governs, I required that the contract show the amount of $500. This contract which included $500 for item 20A, was signed by Stiers Bros. Construction Co.

'In their letter to the Board of Commissioners dated November 10, 1939, they claimed that the contract price of $500 is incorrect and in error, and that they actually bid $500 per gate. Their letter is self-explanatory:

'It appears that a mistake has been made and that the price bid for item 20A should have been $1,000.

“ 'It is recommended that an adjustment be made in the contract whereby item 20A is changed to $1,000.

" 'HAROLD A. KEMP, " 'Chief Engineer, Department of Sanitary Engineering.'

“'NOVEMBER 28, 1939. • 'ENGINEER COMMISSIONER.

“ 'Recommending that the amount of item 20-A of the schedule of prices of contract No. 13722, Rock Creek Diversion Sewers, West Side, PWA Docket No. DC 1025-F, Unit 6, Stiers Bros. Construction Co., contractor, be increased from $500 to $1,000.

''In the light of the contractor's letter of November 10, addressed to the Commissioners, it appears that his error in interpretation of the wording of the concerned item in the schedule of prices is obvious and reasonable. A photostat of sheet No. 7-F of the schedule of prices, as submitted by the contractor, is attached. Also attached is a photostat of the schedule of proposals received, from which it will be noted that, even with the recommended correction, the successful bidder's price on this item is considerably under any of the other bidders. “ 'Reference to the Auditor, District of Columbia, is recommended.

" 'J. B. GORDON, « Director of Sanitary Engineering.'

“The written contract No. 13722, which was signed by the contractor and the District, contains the following:

'ARTICLE 1. Statement of work. --The contractor shall furnish material and perform the work required for the construction and completion of West Side, Rock Creek Diversion Sewers, along the west side of Rock Creek, between the Potomac River and Thirtieth Street NW, to the intersection of Connecticut and Cathedral Avenues NW, Washington, D. C., for the consideration of the following prices: all in strict accordance with the advertisement for bids, the instructions to bidders, the accepted proposal, the general conditions, the detailed specifications, addenda Nos. 1, 2, and 3, hereunto attached, and drawings Nos. 1 to 38, inclusive, which are hereby made part and parcel of this contract to the same extent as if incorporated herein in full.' (Italic supplied.)

“This is immediately followed by the prices referred to, and item 20-A reads:

Item
No.

Description

Price

20A

For furnishing and installing 2 backwater gates with appurtenances in west side

diversion sewer, the lump sum of..

$500

"The accepted proposal referred to in the above article 1 of the written contract and which is thereby made a part of the entire contract is the proposal as submitted by the contractor and without any change thereon and item 20A thereof is as follows:

Item No.

Approxi.

mate quantities

Items and unit prices bid

Unit price

Amount

20A

[blocks in formation]

Lump, Furnishing and installing 2. backwater gates with appur

tenances in west side diversion sewer, at $500 lump sum.

sum.

"In summary: The original submission stated that the error in the bid was not noticed until after the award had been made, whereas, in reality, it was noted and brought to the attention of the District officials involved in the recommendation of award at the time bids were opened. Secondly, $500 was considered to be the price bid as a result of a decision of the Chief Engineer, Department of Sanitary Engineering (supra, pp. 3 and 4) and without consulting the bidder to determine its actual intention. In the third place, the contract itself provides that the work described shall be done in accordance with the accepted proposal which was made a part and parcel of the contract, and this accepted proposal would seem to indicate clearly the true intent of the bidder. It would appear that the entire contract is at least ambiguous on its face with respect to the price agreed to be paid and that it is permissible to consider evidence of the intention of the parties, and that this is authorized by Brawley v. United States (96 U. S. 168).

"In the light of these additional facts and calling particular attention to your decision to the Secretary of the Treasury dated July 28, 1939 (19 Dec. Čom. Gen. 116), your reconsideration of the question whether the Commissioners of the District of Columbia have authority to allow the contractor's claim with respect to item 20A of the contract and make payment of the sum of $500 to him at this time is requested.”

The additional facts now reported by you show that, before the bid was accepted, the representatives of the District of Columbia noted the fact that although the bidder quoted a lump-sum price of $500 the extended total was shown as $1,000, but there is nothing in the record to indicate that such representatives knew, at that time, that the lump-sum price was intended to be $1,000 and not $500 as stated, and the subsequent action of the contracting officer in accepting the bid and including it in the formal contract as for a lump-sum price of $500 clearly indicates that the contracting officer believed the price of $500 to be the intended lump-sum bid.

Secondly, you urge, in effect, that relief should be given the contractor because the sum of $500 was considered to be the bid price without consulting the bidder to determine its actual intention. There is, however, no duty on the part of a contracting officer to act as guardian for a careless bidder; and the contracting officer had no difficulty in construing the bid, which construction ultimately was

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