Court of Claims.
*328 *329 *330 *331 *332 John W. Gaskins, of Washington, D. C. (King & King, of Washington, D. C., Thomas H. Munyan, of Atlantic City, N. J., and Harry D. Ruddiman, of Washington, D. C., on the brief), for plaintiff.
Philip Mechen, of Iowa City, Iowa, Newell A. Clapp, of Chicago, Ill., and Francis *333 M. Shea, Asst. Atty. Gen. (Horace G. Marshall, of Chicago, Ill., on the brief), for defendant.
Before WHALEY, Chief Justice, and LITTLETON, WHITAKER, JONES, and MADDEN, Judges.
On October 10, 1942, the National Housing Agency, Federal Public Housing Authority, hereinafter for brevity referred to as the Authority, invited bids for the construction of a war housing project at Hatboro, Pennsylvania. The invitation stated that bids would be opened at the Authority's office at 270 Broadway at 2 P.M. on October 22. On October 21, the plaintiffs mailed a letter from Atlantic City, New Jersey, which was their principal place of business, to the Authority, containing a bid of $693,000. This letter arrived in time for the opening of bids.
The instructions to bidders, which were sent by the Authority to prospective bidders, and pertinent parts of which are quoted in finding 3, contained in section 9 (1) a provision that telegraphic modifications of bids already submitted in writing would be considered if received by the Authority prior to the hour set for the opening of bids. This provision, which was usual in invitations, was often made use of by bidders, including the plaintiffs, when bidding for Government contracts. It enabled them to set their final bids on the basis of late offers received by them from prospective subcontractors, and of late information concerning prices. The plaintiffs, having received late offers from subcontractors justifying a reduction of their mailed bid, sent a telegram at 12:43 P.M. on October 22 reducing their bid by $50,000. The plaintiffs very strongly desired that this telegram should reach the Authority before 2 P.M., and sought to have the telegraph company guarantee that it would do so. The company would not so guarantee, and in fact the telegram was not delivered to the Authority until about 3 P.M.
At 2 P.M. the bids, of which there were five, were opened by a Mr. Skinner in the conference room of the Authority's offices in New York, and the amounts of the bids were read aloud to those present. The plaintiffs' bid of $693,000 was lowest, the next one being $4,000 higher. A Mr. Hager of Philadelphia, who was in the insurance and surety bond business, had been requested by the plaintiffs to attend the opening to observe and report what happened. After the bids had been read, Hager went downstairs to a public telephone and called the plaintiffs and advised them that their bid of $693,000 was the low bid. He was asked by the plaintiffs to find out whether their telegram modifying their bid had been received. He returned to the room where the bids had been opened, and was told by Skinner that he had not heard of any such telegram. Hager then returned to the public telephone and reported to the plaintiffs what he had learned. He was told to go back and tell Skinner to disregard the telegram when it arrived, as it had been sent "in error."
While Hager was downstairs on this errand an air raid alert had been called at 2:30, and the employees in the various offices of the building were required to assemble in the halls outside their offices. The elevators were not running and Hager climbed the stairs to the fourteenth floor where, when the alert was over at 2:40, and when Hager had recovered his breath, he told Skinner, in substance, that the plaintiffs wished their telegram to be disregarded when received, as it had been sent by mistake. This conversation was concluded by about 2:45 P.M. Skinner then returned to his office on the twenty-eighth floor of the building. Shortly after 3 o'clock his secretary told him that she had received a telephone call advising her that a telegram relating to the plaintiffs' bid had come to the Authority. Skinner asked that the telegram be sent to him immediately by special messenger, which was done. This was the telegram reducing the plaintiffs' bid by $50,000. The receiving room stamp on it showed the time of receipt as two or three minutes after 3 P.M., and it had been delivered to the Authority, at the receiving room, not more than ten minutes before that time.
The plaintiffs, at 4:27 P.M. on the same day, sent another telegram, which is quoted in finding 11, requesting the authority to disregard the telegram modifying the written bid. This telegram was not received by the Authority until the next day.
On November 6 the Authority wrote the plaintiffs that it had accepted their bid of $693,000, as reduced by their telegram, and that a contract setting the price at $643,000 was being prepared for the plaintiffs' signature. On November 12 the plaintiffs and the Authority signed such a contract, but *334 pursuant to discussion, inserted in it the following statement:
"Notwithstanding anything to the contrary herein, it is mutually understood and agreed by and between the parties hereto that neither the execution of this Contract nor any action taken thereunder, nor the recital of the contract sum herein, shall constitute or be construed as a waiver by the contractors of any right which the said contractors might have to establish, by such lawful process as the said contractors shall deem expedient, the true contract price to be the sum of $693,000 being the amount of the written bid submitted plus the cost of the Performance and Payment Bonds as hereinbefore stated. The government grants the aforesaid right of action to the contractors and shall not interpose the defense of waiver or estoppel.
"It is further mutually understood and agreed by and between the parties hereto however that any action taken by the contractors for the purpose aforesaid must be instituted within ninety days from the date hereof."
The construction called for by the contract has been completed. The plaintiffs are suing for the $50,000 involved in the telegram, the history of which is recited above. The plaintiffs assert that, since their telegram reducing their bid had not been received by the Authority by two o'clock, the hour set for opening bids, and since section 9 (1) of the instructions to bidders, quoted in finding 3 said "Unless specifically authorized, telegraphic bids will not be considered, but modifications by telegraph of bids already submitted will be considered if received prior to the hour set for opening:", the Authority had no right to consider their telegraphic modification, just as they would have had no right to have it considered, if their original bid had not been the low bid. The Government urges that the quoted provision was inserted for the benefit of the Government; that it could, at its option, either insist upon it or waive it; and that since the plaintiffs' bid in writing was already low, and hence no other bidder could complain, there was no reason why the Government could not accept a still lower, though belated, offer from the already low bidder. A comparable problem was involved in Leitman v. United States, Ct.Cl., 60 F. Supp. 218, and we said that, where the late telegram came from a bidder who was already low, the reason for the placing of the time limit on modifications did not apply. But in view of the facts which we have found, and the applicable law as we see it, it is not necessary to further consider that question in this case.
We think that the plaintiffs did not make an effective offer to reduce their written bid. They dispatched a telegram intended to make such an offer, but when they learned that the telegram had been delayed and that their written bid of $693,000 was low, they formed the intention to withdraw the offer contained in the telegram, and communicated that intention to the intended offeree, the Authority, before their offer reached it. An offer is not made until it is communicated to the offeree, and until it is made it may be withdrawn, or obliterated, by a communication expressing an intent to do so. If the willingness to contract on the basis of words previously dispatched no longer exists, and if the absence of that willingness has been brought home to the person to whom the words were dispatched, the words, when they later arrive, are empty of the substance necessary to the meeting of the minds of parties in a contract. We have found that the plaintiffs' oral message, withdrawing the offer to reduce their bid, was delivered through Hager to Skinner before the telegram was delivered to the Authority. There was, therefore, no offer to reduce the bid, made either on time or late, which the Authority could accept, either under the particular procedures by which Government contracts are made, or under ordinary contract law.
The Government contends that the provisions of the paragraph next to the last, quoted in finding 2, and of section 8 (4) of the instructions to bidders, quoted in finding 3, requiring the submission by a bidder with his bid of a bid bond, made the plaintiffs' written bid and its telegraphic modification irrevocable for thirty days, like an offer made for a consideration, or an offer under seal at common law. The plaintiffs contend that their bid was only an offer, and was therefore revocable by them without any penalty except the forfeiture of their bid bond, at any time before acceptance, which here did not take place until some fifteen days after the opening of the bids and the events relating to the telegram.
Again we do not find it necessary to resolve these contentions. The facts here do not involve the revocation of an offer, but the making or, as we have found, the nonmaking of a contemplated offer to do the *335 work for $50,000 less than the sum specified in an offer formerly made. Since the contemplated offer was not made, the question of the revocability of such an offer, if it had been made, will not be considered. It is true that when the plaintiffs sent the telegram reducing their written bid, they intended to modify, or pro tanto revoke, their previously made offer. But before that offer was communicated, they had changed their minds and again were willing to stand by their original offer. The Authority never having been advised of any desire on the part of the plaintiffs to revoke their $693,000 offer, indeed, having been affirmatively advised that the plaintiffs adhered to that offer, had the right to accept it within the thirty-day period named in the instructions to bidders, and thereby make a binding contract for that amount. The problems that arise here are, therefore, not problems of the revocability of offers.
As we have said, the parties signed a contract on November 12, 1942, naming the contract price as $643,000, but containing the proviso above quoted. The Government urges that this contract settles the question of price; that whether or not the plaintiff had offered to perform the contract for $643,000, it made a contract to do so, which made all the preceding events irrelevant. It says, and the plaintiffs concede, that the plaintiffs had no right, as a result of their being the low bidder at $693,000 to a contract; that the Government had not promised to award the contract to anyone. The Government further says that, the Authority having learned from the telegram that the plaintiffs were willing to do the work for $50,000 less than $693,000, whether they had effectively offered to do so or not, it would not have awarded the contract to the plaintiffs or any other bidder at $693,000, but would have re-advertised for new bids, if the plaintiffs had not been willing to make the contract for $643,000. This is speculation. To be sure, the Authority had learned something from the plaintiffs' belated telegram, but it knew that the plaintiffs had learned something from the public opening of the bids of other bidders. What the Government would have done would have, probably, depended on the trend of prices of labor and materials, and the necessity for early completion of the work, which was a war housing project. Re-advertising would have taken time, which might have been regarded as more valuable than the possibility, by no means a certainty, of saving some money.
We consider now what we regard as the essence of the case; the meaning of the special language inserted in the contract because of the problem arising out of the telegram relating to the $50,000. The plaintiffs contend that the contract is, in reality, a promise by the Government to pay either $643,000 for the work, or, if it shall be determined by suit that the Government did not have a bid, which it had a right to accept, for $643,000, but only a bid for $693,000, then to pay $693,000. The Government contends that the inserted language means only that the plaintiffs may bring a suit and that the Government will not interpose the defenses of waiver or estoppel; but that it affects in no way the balance of the contract which is a plain agreement on the part of the plaintiffs to do the work for $643,000.
Of the plaintiffs' asserted interpretation of the special language, one must say that the language is an inept way of saying what the plaintiffs say it means. As to the Government's asserted interpretation, it makes the language quite completely futile and useless, as well as somewhat self-contradictory when read in connection with the rest of the contract. Whether it is called waiver, estoppel, or something else, it comes very close to one of those concepts to be told that one paragraph of their contract, specially written and inserted, gives the plaintiffs no rights because the contract which they have signed contains other contradictory paragraphs. So we have a situation in which the meaning for which the plaintiffs contend is by no means the plain meaning of the words in question, and the meaning for which the Government contends is, in essence, no meaning at all. We must, therefore, either omit the language from our consideration altogether, or search for its meaning in the expressions of the parties at the time they formulated the cryptic language, and the background of events in which they used it.
If the Government agents who made the contract held the same beliefs as the Government lawyers express in their briefs; that the telegram was, or probably was, delivered to the Authority before it was countermanded by the sender; that it therefore constituted a bid, if the Authority chose to waive the fact of its arrival after the other bids had been opened; and that as a bid it was irrevocable for thirty days, according to the Government's interpretation of the instructions to bidders; then it would seem that the agents of the Authority insisted *336 on the $643,000 figure in the contract because they thought the plaintiffs had bid that amount. That fact would have a tendency to show that the agents of the Authority were willing, if they did not have a bid for $643,000, but one for $693,000, to pay $693,000 for the work; that they were somewhat uncertain as to which figure was the plaintiffs' effective bid, and were willing to insert the special language in the contract to permit the plaintiffs to establish, in litigation, which was the effective bid, and to express the thought that the contract price should be whatever amount should be so established. If that was what the parties meant by the special language in the contract, the plaintiffs are entitled to recover, as we have determined that the plaintiffs' only bid was $693,000.
We remanded the case for a hearing of evidence as to the intent of the representatives of the parties when they composed the reservation which was written into the contract, as shown by what they said in their conversations about it. On the basis of that evidence, we have concluded that the parties were in disagreement as to what amount the plaintiffs had effectively bid; that neither party was willing to make an unqualified contract for the amount which the other contended to be the amount of the bid; that they reached an agreement to qualify the language of the contract so that it would permit the plaintiffs to establish the bid price, which would thus be the contract price, by litigation, in which the disputed facts relating to the telegram could be resolved, and the correct rules of law could be applied to them.
We therefore construe the ambiguous special language in the contract of November 12, 1942, as intended to mean that the price should be $643,000, or $693,000 if that sum should be shown by litigation to be the plaintiffs' bid. We have concluded above that the plaintiffs' bid was $693,000. That was, therefore, the price which the Authority promised to pay for the work. It follows that the plaintiffs may recover $50,000.
It is so ordered.
WHALEY, Chief Justice, and WHITAKER and LITTLETON, Judges, concur.
JONES, Judge, took no part in the decision of this case.
Case Name: Miller v. United States
Citations: 62 F. Supp. 327
This case can be cited as precedent.