65 F. Supp. 391 | Ct. Cl. | 1946
delivered the opinion of the court:
Defendant advertised for bids early in 1942 for furnishing and installing an interoffice communication system in the Office of the Port Director, Third Naval District at New York. Plaintiff’s bid of $935 for a Bogen Communo Phone Installation, an interoffice communication loud speaker system offered by it, was accepted and on March 17, 1942, a contract on the Standard Form 23 for supplies was executed. E. N. Dudgeon, of the Navy Purchasing Office at New York,
The Interoffice communication system shall consist of 19 “Master” type units. Equipment shall be designed to operate from a power source of 120 Volts D. C. Suitable filters shall be incorporated to reduce to a minimum any disturbances present in the power supply.
It shall be possible for any station to call and talk with any other station in the circuit. It shall be possible also, for a number of conversations to be held simultaneously without interference with each other. There will be 19 stations. These stations shall be located at 19 points indicated on the building plan submitted for an estimate.
Two bids other than plaintiff’s were submitted, one for $1,816 by the Lektra Laboratories, Inc., for a loud speaker system operated by the building current, and by Dicto-graph Sales Corp. for $2,757.31 for a system that operated on the telephone principle and on batteries. Plaintiff installed its communication system about April 24, and when it was put in operation before it had been formally accepted a dispute arose concerning the operativeness and proper functioning of the system (findings 4 and 5). As a result the system as installed by plaintiff was finally rejected June 3, 1942, and a readvertisement for bids was issued for an interoffice communication system under the original specification. Four bids ranging from $1,816 to $2,973.50 were submitted and the bid of $2,757.31, less a discount of 1 percent (which was the third lowest) of the Dictograph Sales Corp., under specifications differing substantially and materially from those of plaintiff’s contract, was accepted (findings 6-8). Plaintiff’s contract as executed by the parties called for a system operated on a loud speaker principle and powered by the building current. This system was more noisy than a battery operated system which also operated similarly to the telephone, and such electric current system was useless when the building current should be off, as was sometime the case during a “blackout” in 1942. The accepted bid of the Dictograph Sales Corp. was in the exact amount and for the specific system offered in its
While plaintiff does not expressly abandon its claim in the petition for the contract price of $935, which defendant refused to pay, this item is not argued in the brief and the statement therein of the issue presented does not include such item. On the evidence recovery of this item could not be allowed. While there is substantial justification in the evidence for the conclusion that one of the main reasons for the rejection of the Bogen Communication Installation called for by the contract and furnished and installed by plaintiff was that when it was put in use it was unavoidably more noisy than the Port Director desired due to electric current disturbances and the fact that it operated on the loud speaker principle, there was no finding that such noises had not been reduced to a minimum for that type of system, which was all the contract required. However, this is not sufficient to justify recovery. The contracting officer found that the system did not properly and satisfactorily operate for other reasons. This finding has not been overcome by plaintiff’s proof and no appeal was taken from the findings made.
The claim for the item of $1,794.74, demanded and collected by the contracting officer as being due the Government under the terms of Article 4 of the contract, presents a different question as to which the contracting officer’s decision was not final under Article 15 of the contract. That question is whether, as a matter of law, plaintiff is entitled to recover this amount because the contracting officer, in reletting the contract for an interoffice communication system, materially and substantially departed from the requirements of his contract with plaintiff in this regard. Defendant admits that there was such a material and substantial departure and that there were “Material and substantial differences between the battery operated equipment purchased from the Dictograph Sales Corporation and the interoffice communication system described in the [contract] specifications and furnished by the plaintiff.” In view of these
It has long since been held that where the Government by reason of a claimed default in the performance of a contract elects under its terms to relet the contract and charge the increased cost, if any, to the defaulting contractor, such charge may not be sustained if in the reletting there is a material or substantial departure from the original contract terms. American Bonding & Trust Co. v. Gibson County, 127 Fed. 671; United States v. Axman, 234 U. S. 36; California Bridge Co. v. United States, 245 U. S. 337.
Defendant argues, however, that the court is without jurisdiction of plaintiff’s claim under Section 145 of the Judicial Code (Title 28, U. S. C., sec. 250) because it is not founded upon an express contract or one implied in fact. This argument cannot be sustained. The claim is founded upon and grows out of the written contract of March 17, 1942, with plaintiff. Defendant impliedly agreed in that contract not to materially depart from the terms thereof in reletting it or in purchasing the supplies in the market. The claim is therefore one which arose from the breach of plaintiff’s contract under Section 145, supra. We can find no merit in defendant’s argument that plaintiff should not be allowed to recover because it paid the amount in question under protest when it probably was not legally obligated to do so.
Plaintiff is entitled to recover, and judgment for $1,794.74 will be entered in its favor. It is so ordered.