Court Opinion

ID: 8597031
Source: CourtListenerOpinion
Date Created: 2022-11-23 16:04:22.533642+00
Date Added: 2024-06-11T16:55:00.427237
License: Public Domain

BENNETT, Judge,
dissenting to order of the court of October 10,1980 denying defendant’s suggestion for rehearing en banc and motion for rehearing:
Defendant has moved for a rehearing in this case with a suggestion for a rehearing en banc. The court has denied the motion and suggestion. I dissent.
There is only one issue now contested — the so-called First Articles claim for which plaintiff is given a judgment of $802,448.94. The invitation for bids (IFB) called for a total quantity of transmitters and indicated that first sample articles could be refurbished and supplied as part of the total quantity. The contracting officer, however, took the unwarranted position that first articles had to be supplied in addition to the total quantities. In effect, the contracting officer claimed the IFB required eight more transmitters than it actually did or that the bidders bid on. Even though the contracting officer’s position was clearly incorrect (as the court agrees), plaintiff acquiesced in his position and signed the contract. The contract included letters from plaintiff and the contracting officer indicating that plaintiff would supply the eight extra transmitters and included plaintiffs bid price as the contract price. The court insisted that plaintiff never agreed to deliver the extra transmitters without a price increase. However, plaintiff did sign the contract which had definite and unambiguous price and quantity terms. No price increase was agreed upon at all. Eventually, plaintiff appealed to the ASBCA. The board found that the contracting officer’s position was totally unwarranted and clearly contradicted the IFB. However, it held plaintiff entitled to no relief since it had acquiesced in the contracting officer’s position. Plaintiff sued here and the trial judge reversed the board. The court affirmed the trial judge’s ruling. I dissented.
*353The crux of the dissent is that the regulations that were supposedly violated by the contracting officer’s actions were not for the benefit of plaintiff and so could not be relied on by plaintiff to reform the contract. The regulations in question simply require that bids comply with an invitation in all material respects — obviously for the Government’s benefit and that of other bidders, not for plaintiffs benefit.
However, there is another serious weakness in the court opinion. The court labors greatly to show that the contracting officer’s actions violated the IFB and regulations. It concludes that the contracting officer had no authority to award the contract in the way that he did and that he acted unlawfully. The court nevertheless reforms the illegal contract to force defendant to pay for the extra transmitters. The problem with this reasoning of course is the Supreme Court precedent in Federal Crop Ins. Corp. v. Merrill, 332 U.S. 380 (1974), which holds that unauthorized contracts cannot bind the United States. The court nowhere explains how it can conclude on the one hand that the contracting officer had no authority to award the contract as he did, and on the other, hold that plaintiff may still enforce the contract against the Government.! The court validates the contract on the basis of a factual situation it frankly recognizes did not exist but which it only hypothesizes. There is absolutely nothing in any of the actions of the contracting officer on which to predicate the court’s conclusion that "he was prospectively exercising the option of the contract by increasing the number of production units from 362 to 370.” The exercise of the option was permissible, but his plain language in doing so is required, especially as the court says his demands for the extra units were unlawful in the manner in which they were made. His intent was clearly to get the extra units without further cost instead of exercising his option to pay for them. How can we ascribe to him an intent so contrary to his actions and words?
The proper result, following the court’s reasoning, would be to nullify the entire contract or at least the unauthorized portion of it. Plaintiff would then argue that defendant has been unjustly enriched and would seek relief on a restitution theory.
*354The court opinion, which employs an admitted fiction to achieve its result, ignores the Federal Crop Ins. Corp. decision, which has been the precedent for innumerable decisions, assumes facts not of record, unsettles the administration of public contracts, and gives plaintiff a favorable bidding status not enjoyed by competitors.