author: KASHIWA, Judge.

text:
    MOUNTAIN STATES TELEPHONE AND TELEGRAPH COMPANY v. The UNITED STATES.
    No. 369-72.
    United States Court of Claims.
    June 19, 1974.

      Judith A. Yannello, Washington, D. C., for plaintiff; John B. Tacke, Washington, D. C., attorney of record. Hudson, Creyke, Koehler, Brown & Tacke, Washington, D. C., of counsel.
    Thomas L. McKevitt, Washington, D. C., with whom was Asst. Atty. Gen. Wallace H. Johnson, for defendant. Robert A. Zupkus, Washington, D. C., of counsel.
    Before COWEN, Chief Judge, DUR-FEE, Senior Judge, and KASHIWA, Judge!
   KASHIWA, Judge.

This is a suit for the return of $3,195, ■allegedly excessive fees paid annually under protest to the Department of Agriculture.

The action arises from plaintiff’s dissatisfaction with the fee charged for a special-use permit issued by the United States Department of Agriculture, Forest Service, on June 17, 1960, authorizing plaintiff to maintain a microwave relay facility at a 125 x 150 square foot site on Mt. Lemmon in the Coronado National Forest, Pima County, Arizona. Plaintiff paid, since January 1, 1964, a $600 annual fee for the privilege of holding this permit. Plaintiff alleges that the fee. should have been $300 per annum instead of $600. Plaintiff argues that the regulation (36 C.F.R. 251.3(a)) and its interpretation, authorizing a fee based on the value of the use in light of the investment in the property, constitute an abuse of discretion by the Secretary of Agriculture (hereinafter referred to as “Secretary”).

Plaintiff alleges that it has paid the fees in issue herein under protest since January 1, 1964. A final decision against plaintiff in the administrative proceedings relating to its protest was issued by the Secretary on November 7, 1972. Portions of the decision, as relevant herein, read:

The central issue in this appeal is whether the Forest Service method of determining fees for electronic sites utilizing on-site investment as reiterated in Circular U-275 is a proper method of determining such fees for the use of Natonal Forest land under special-use permit. Appellant contends that the fee should be based on fair market value. A review of the record indicates that fair market value as described by the appellant is the value of undeveloped land as has been determined for recreation residence purposes.
The appellant takes the position in this proceeding that the Forest Service interpretation of 36 CFR 251.3(a) equating “value of the use” with value to the user, and the implementation through fees determined against on-site investment, are each unlawful exercises of administrative authority because:
1. A use charge based on other than fair market value standards is contrary to the will of the Congress.
2. Implementation of guide fees provided in Circular U-275 results in arbitrary assessment against Mountain States because its on-site investment is not synonymous with value of the use.
3. The fee imposed may not be sustained because it is patently excessive and unreasonable.
4. Fees based on Mountain States investment on the site are contrary to public policy and the recommendations of the Public Land Law Review Commission.
* * * * * -X-
The position taken by the appellant is not persuasive in the matters of argument. I therefore sustain the decision of the Chief, Forest Service that microwave site fees are appropriately developed using the on-site investment approach and that the Mt. Lemmon fee was correct for the investment in place.
I decline to grant the relief sought for the following reasons: It is my belief that value of the use is an appropriate basis for charging a fee; that the Regulation as constituted has stood the test of time, it allows the use of the market to establish value for each particular kind of use, and raw land value in the context of appellant’s pleading does not provide an appropriate rental for microwave purposes. I see no purpose being served in revising 36 CFR 251.3(2).

This action was filed on February 22, 1973. The issue presented herein is the same as that before the Department, and the arguments presented are substantially the same as those presented to the Department.

The ease is now before us on cross motions for summary judgment. There are no material facts in dispute. Defendant’s cross motion for summary judgment is allowed for reasons hereinafter stated.

It is not disputed that management and control over lands of the United States is in Congress under Article IV, Section 3 of the Constitution. In Sierra Club v. Hickel, 433 F.2d 24, 28 (9th Cir. 1970), aff’d, 405 U.S. 727, 92 S.Ct. 1361, 31 L.Ed.2d 636 (1972), the court said:

Article IV, Section 3 of The United States Constitution commits the management and control of the lands of the United States to Congress. That congressional power is unlimited. The Supreme Court said in Gibson v. Chouteau, 80 U.S. (13 Wall.) 92, 99, 20 L.Ed. 534 (1872):
“With respect to the public domain, the Constitution vests in Congress the power of disposition and of making all needful rules and regulations. That power is subject to no limitations.”
See also Alabama v. Texas, 347 U.S. 272, 274, 74 S.Ct. 481, 98 L.Ed. 689 (1954).

Congress may delegate the power to manage federal lands to the Executive. United States v. Grimaud, 220 U.S. 506, 31 S.Ct. 480, 55 L.Ed. 563 (1911); Light v. United States, 220 U.S. 523, 31 S.Ct. 485, 55 L.Ed. 570 (1911); Best v. Humboldt Placer Mining Co., 371 U.S. 334, 83 S.Ct. 379, 9 L.Ed.2d 350 (1963); United States v. Hymans, 463 F.2d 615 (10th Cir. 1972); McMichael v. United States, 355 F.2d 283 (9th Cir. 1965); United States v. Cassiagnol, 420 F.2d 868 (4th Cir. 1970), cert. denied, 397 U.S. 1044, 90 S.Ct. 1364, 25 L.Ed.2d 654; Sierra Club v. Hickel, supra. The basic statute relating to regulation of the national forests is 16 U.S.C. § 551. It reads as follows:

The Secretary of Agriculture shall make provisions for the protection against destruction by fire and depredations upon the public forests and national forests which may have been set aside or which may be hereafter set aside under the provisions of section 471 of this title, and which may be continued; and he may make such rules and regulations and establish such service as will insure the objects of such reservations, namely, to regulate their occupancy and use and to preserve the forests thereon from de struction; * * *. [Emphasis supplied.]

The statute reveals a clear intent of Congress to commit regulation of the national forests to the discretion of the Secretary. A similar statute relating to the regulation of federal property placed in charge and control of the General Services Administration (hereinafter referred to as “GSA”) is 40 U.S.C. § 318. In United States v. Cassiagnol, supra, 420 F.2d at 876-877, with relation to the delegation to GSA of the authority to make regulations governing the operation, maintenance, and use of such property under its control, the court held:

* * * It is clear that Congress has constitutional power to “make all needful Rules and Regulations” concerning government property. Under such constitutional authority Congress delegated the authority to make regulations governing the operation, maintenance and use of government property to the GSA Administrator. Such authority necessarily had to be somewhat general in nature due to the vast number and great variety of properties entrusted to the charge and control of GSA, but this authority, contrary to appellants’ contention, was not unlimited. GSA was given physical control and custody of a wide variety of public buildings in and out of the District of Columbia, including courthouses, customhouses, barge offices and office buildings. The function exercises in relation to such property is essentially one of maintaining, operating and protecting buildings and grounds for the uses for which they have been designated. Congress fixes the governmental purpose of a particular piece of property and limits the GSA Administrator’s power to make “needful rules and regulations” to maintain and protect such property and ensure its use for the authorized purpose. To require Congress specifically to enumerate GSA’s duties would be to require the impractical if not the impossible. Similar grants of general regulatory and administrative authority are common, e. g., national parks, national military parks and battlefields, national forests, watersheds, etc. It is reasonable and constitutional to delegate to the agency charged with maintenance and protection of government property the right to fix the hours and places where the property may be entered by the public, as well as minimum acceptable conduct thereon, and to provide for the punishment of those violating such regulations. As was stated in United States v. Grimaud, 220 U.S. 506, 521, 31 S.Ct. 480, 484, 55 L.Ed. 563 (1911), supra,
“* * * [T]he authority to make administrative rules is not a delegation of legislative power, nor are such rules raised * * * to a legislative character because the violation thereof is punished as a public offense.”
We find 40 U.S.C. § 318 to be a constitutional delegation of administrative authority to the Administrator of GSA to promulgate “needful rules and regulations” pertaining to government property under the charge and control of GSA. [Footnotes omitted.]

Among the terms which may be set by the Forest Service to accompany use of federal lands is the payment of permit fees. These fees may be fixed in an -amount determined by the Forest Service. United States v. Grimaud, supra, 220 U.S. at 521-522, 31 S.Ct. 480; Pankey Land and Cattle Co. v. Hardin, 427 F.2d 43 (10th Cir. 1970). In United States v. Golden Gate Bridge and Highway Dist. of California, 37 F.Supp. 505, 510 (N.D.CaI.1941), aff’d, 125 F.2d 872 (9th Cir. 1942), cert. denied, 316 U.S. 700, 62 S.Ct. 1298, 86 L.Ed. 1769, the court said, “There can be no doubt that when the Secretary has the authority ‘in his discretion’ to grant the permit, he has the power to condition it.”

Pursuant to 16 U.S.C. § 551 above quoted,- the Secretary has promulgated certain • regulations concerning the national forests. Among them are the following, authorizing the Forest Service to issue special-use permits and establish fees therefore:

36 C.F.R. 251.1 (1960 Ed.)
(a) Special uses. (1) All uses of national forest lands, improvements, and resources, including the uses authorized by the act of March 4, 1915 (38 Stat. 1101), as amended July 28, 1956 (Pub.Law 829, 84th Cong.; 70 Stat. 708; 16 U.S.C. 497), the act of March 30, 1948 (62 Stat. 100; 48 U.S.C. 341), and section 7 of the act of April 24, 1950 (64 Stat. 84; 16 U.S.C. 580d), and excepting those provided for in the regulations governing the disposal of timber and the grazing of livestock or otherwise specifically authorized by acts of Congress, shall be designated “special uses,” and shall be authorized by “special use permits.”
36 C.F.R. 251.3(a) (1960 Ed.)
(a) Special use permits, except as otherwise provided in this section or § 251.2, or specifically authorized by the Secretary of Agriculture, shall require the payment of a fee or charge commensurate with the 'value of the use authorized by the permit, the amount of which shall be prescribed by the Chief of the Forest Service. * * * [Emphasis supplied.]

The Secretary has adopted a fee schedule which reflects “value of the use” as set by 36 C.F.R. 251.3(a). Great deference has always been given to the interpretation of a regulation by the agency charged with its administration. As stated in Udall v. Tallman, 380 U.S. 1, 16-17, 85 S.Ct. 792, 801, 13 L.Ed.2d 616 (1965):

* * * When the construction of an administrative regulation rather than a statute is in issue, deference is even more clearly in order.
“Since this involves an interpretation of an administrative regulation a court must necessarily look to the administrative construction of the regulation if the meaning of the words used is in doubt * * *. [T]he ultimate criterion is the administrative interpretation, which becomes of controlling weight unless it is plainly erroneous or inconsistent with the regulation.” Bowles v. Seminole Rock Co., 325 U.S. 410, 413-414, 65 S.Ct. 1215, 1217, 89 L.Ed. 1700.

Further, there is a presumption of the regularity of administrative action. Thompson v. Consolidated Gas Utilities Corp., 300 U.S. 55, 69, 57 S.Ct. 364, 81 L.Ed. 510 (1937); Pacific States Box & Basket Co. v. White, 296 U.S. 176, 185, 56 S.Ct. 159, 80 L.Ed. 138 (1935). This presumption is not rebutted by the mere fact that an agency’s particular course of action is unique as compared to either the private sector or to the remainder of Government. And even failure to follow a “long established custom” does not render illegal an action of a federal official that is within the scope of his authority. Pennsylvania Water & Power Co. v. Federal Power Commission, 74 App.D.C. 351, 123 F.2d 155 (1941), cert. denied, 315 U.S. 806, 62 S.Ct. 640, 86 L.Ed. 1205 (1942); Federal Communications Commission v. WOKO, Inc., 329 U.S. 223, 228, 67 S.Ct. 213, 91 L.Ed. 204 (1946) ; 2 Davis Administrative Law Treatise, sec. 17.07, pp. 525-530.

Since the amount of recovery involved in individual communication permit cases is small and they are usually settled, it is unfortunate that there are not many reported cases. But this court’s attention has been called to a recent unreported decision which is much in point. In United States v. Industrial Communications System, Inc., USDC CD Calif., No. 69-1070-JWC, decided April 6, 1971,. aff’d per curiam, C.A. 9, August 22, 1973, No. 71-2467, a case in which the Secretary was involved and concerning the same 16 U.S.C. § 551 and regulations 36 C.F.R. §§ 251.1 and 251.3, the court held:

Title 16 U.S.C. § 551 authorizes the Secretary of Agriculture to make rules and regulations relating to the use of national forests. Title 36, Code of Federal Regulations, §§ 251.1 and 251.3 govern the issue of special use permits which are to be issued by the Chief of the Forest Service or one of his agents, the charges for which shall be “a fee or charge commensurate with the value of the use authorized by the permit, the amount of which shall be prescribed by the Chief of the Forest Service.”
A special use permit is not a lease, but is merely an authorization to use certain land upon payment of a fee. It creates a tenancy at will and may be revoked at any time, for any reason. Although the rules provide that the rental charged shall be “commensurate with the value” [Emphasis in original.] of the use authorized by the permit, it is clear that that the Chief of Forest Service is the person who has the authority to make that determination. Once made, it is beyond review by this court unless the determination has been made arbitrarily or capriciously. * * *
* * «■ •» -x-. *
Furthermore, according to the federal regulations, the rental fee is to be based upon “the value of the use authorized by the permit.” There is nothing in the affidavits before this court which would indicate that the rental charge was otherwise determined. [Emphasis supplied.]

In Ness Investment Corp. v. United States Department of Agriculture, Forest Service, 360 F.Supp. 127, 128 (D.Ariz., Phoenix Div. 1973), the court said with relation to the discretion lodged in the Secretary:

It appears that plaintiffs seek to have the Court conduct a de novo hearing and find facts; and further, not only review the rejection of the application for a special use permit by Canyon Lake Resort, Inc., but to usurp the powers of the Forest Service and judicially set conditions and terms for a use permit at Canyon Lake and make a factual determination whether Canyon Lake Resorts fulfilled those conditions. Thus, what the plaintiffs are asking of the Court is to be architect, planner, engineer, conservationist, water recreation expert, financier, etc., all rolled into one in setting such conditions. The Federal Courts have no jurisdiction and no expertise to set such conditions and terms for a use permittee. [Emphasis supplied.]

As in Ness, supra, plaintiff is asking this court to “judicially set conditions and terms for a use permit” for microwave relay stations. Our authority in this case is limited to those circumstances in which the Government has acted arbitrarily.

The “value of the use” concept found in 36 C.F.R. 251.3(a) has a long history of use by the Secretary. As indicated by the affidavit of Robert W. Long, Assistant Secretary of Agriculture, filed in support of defendant's motion, it first appeared in The Use Book, Regulations and Instructions for the Use of the National Forest Reserves, issued by the Secretary on July 1, 1906. As stated at page 63 of that document:

The charge for permits is based principally upon the value of that which is actually furnished to the permittee by the Forest Service, including advantageous location and other indirect benefits, and not directly upon the profits or the magnitude of the business which is carried on.

The concept was reiterated in The National Forest Manual, Regulations and Instructions, approved by the Secretary on February 1, 1926, which reads, in part, as follows:

In general, the charge should be based upon a fair ground rental of the area involved, taking into consideration the purposes for which it is used * * *. Primarily, the value of the land for the purpose desired rather than for some other use will govern * * [Emphasis supplied.]

The “value of the use” concept was finally codified in 36 C.F.R. 251.3(a) in 1946.

We believe that the Secretary’s decision to promulgate this regulation is well considered. The uses of the national forest are numerous and varied. Many uses present unique situations which preclude the existence of an identifiable free market. The concept of “value of the use” is thus the logical basis for a regulation governing permit fees within the national forests.

Besides being flexible, the “value of the use” standard is also equitable. This system for charging microwave-relay-site permit fees has existed unchanged for nearly 30 years and has been uniformly applied to all users. The fee that a potential user of the public domain could be charged is easily calculable. With advance knowledge of this cost, an individual is free to either accept or reject use of the national forests.

The Secretary, through the Chief of the Forest Service, acted consistently with the considerations behind 36 C.F.R. 251.3(a), as enumerated above. By utilizing “value of the investment” as the measure for the “value of the use” of national forest land as electronic sites, the Secretary has properly applied the regulation. The affidavit of John R. McGuire, Chief of the Forest Service, also filed in support of defendant’s motion, reveals the soundness of this choice and demonstrates that there was no abuse of discretion. As noted in Mr. McGuire’s affidavit, the standard of “value of the investment” was established by Circular U-275 issued by the Chief of the Forest Service on December 15, 1952. Before this procedure was approved, many other methods for determining “value of the use” for electronic sites were considered. The alternatives included land values of general forest use and specific use, a percentage of net profit derived from the site, a percentage of company revenue generated by use of the site, a flat fee per acre, the condemnation value, a fee equal to return from forest products foregone because of this use, and a fee based upon the number of broadcast channels carried over a particular site. The views of American Telephone and Telegraph, plaintiff’s parent company, were also duly considered prior to final adoption of the “value of the investment” standard. None of the methods considered were believed to be both convenient to determine fees and calculated to establish an equitable fee producing a fair return to the public for use of the national forests.

Plaintiff argues that “value of the investment” is not a proper measure for the “value of the use,” but we do not agree. The Mt. Lemmon site is part of plaintiff’s communication grid in the Southwest. As plaintiff increases its communication capacity, the value of the use of the Mt. Lemmon site increases. To increase communication capacity, plaintiff must install more equipment at that location. Consequently, investment at the site reflects the benefits accruing to plaintiff from its.use of the national forest.

As stated in the Secretary’s final decision, “use of the national forest land is, at a particular location, critical to the operation of a communication system and * * * the installation of equipment at such locations has a bearing on the value of the location of the user.” Since the Secretary’s decision to pick “value of the investment” from among the other possibilities is most reasonable, this court holds that there has- been no arbitrary or capricious action which constitutes an abuse of discretion. Courts do not usually inject themselves in the administrative process where "experts may disagree [about matters involving] nice issues of judgment and choice * * * which require the exercise of informed discretion.” Panama Canal Co. v. Grace Line, Inc., 356 U.S. 309, 317, 78 S.Ct. 752, 757, 2 L.Ed.2d 788 (1958).

Plaintiff goes to great length in its brief regarding the recommendations of the Public Land Law Review Commission. The Commission has made many recommendations, but that is all they did. Plaintiff does not deny that it takes congressional action before the recommendations become effective.

The court deems it pertinent that Congress in' 31 U.S.C. § 483a provided as follows:

It is the sense of the Congress that any work, service publication, report, document, benefit, privilege, authority, use, franchise, license, permit, certificate, registration, or similar thing of value or utility performed, furnished, provided, granted, prepared, or issued by any Federal agency (including wholly owned Government corporations as defined in the Government Corporation Control Act of 1945) to or for any person (including groups, associations, organizations, partnerships, corporations, or businesses), except those engaged in the transaction of official business of the Government, shall be self-sustaining to the full extent possible, and the head of each Federal agency is authorized by regulation (which, in the case of agencies in the executive branch, shall be as uniform as practicable and subject to such policies as the President may prescribe) to prescribe therefor such fee, charge, or price, if any, as he shall determine, in case none exists, or redetermine, in case of any existing one, to be fair and equitable taking into consideration direct and indirect cost to the Government, value to the recipient, public policy or interest served, and other pertinent facts, * * *. [Emphasis supplied.]

We place emphasis on the phrase “value to the recipient.” Although said section 483 is only permissive in nature, it shows that fair market value is not the only test. Aeronautical Radio, Inc. v. United States, 335 F.2d 304 (7th Cir. 1964), cert. denied, 379 U.S. 966, 85 S.Ct. 658, 13 L.Ed.2d 559 (1965).

Plaintiff points to the Act of September 3, 1954, 68 Stat. 1146, Pub.L. 771 (83rd Cong.,-2d Sess.), 43 U.S.C. § 931c, which reads as follows:

The head of any department or agency of the Government of the United States having jurisdiction over public lands and national forests, except national parks and monuments, of the United States is authorized to grant permits, leases, or easements, in return for the payment of a price representing the fair market value of such permit, lease, or easement, to be fixed by such head of such department or agency through appraisal, for a period not to exceed thirty years from the date of any such permit, lease, or easement to States, counties, cities, towns, townships, municipal corporations, or other public agencies for the purpose of constructing and maintaining on such lands public buildings or other public works. * * * [Emphasis supplied.]

The Act uses the words “fair market value” but as our emphasized portion indicates, Congress intended the section to apply only where states, counties, cities, towns, townships, municipal corporations, or other public agencies are involved and for the purpose of constructing and maintaining public buildings or other public works. The statute is of very limited application but it is significant that when the Act was passed in 1954, the “value of the use” concept had been codified in 1946 in 36 C.F.R. 251.-3(a) by the Secretary under 16 U.S.C. § 551. It was not the intent of Congress to derogate any of the provisions of 36 C.F.R. 251.3(a) by the Act because a proviso was added to the bill upon an express recommendation of the Department of Justice. Justice recommended the addition of the following proviso:

See. 2. The authority conferred by this Act shall be in addition to, and not in derogation of, any authority heretofore conferred upon the head of any department or agency of the Government of the United States to grant permits, leases, easements, or rights-of-way. [1954 U.S.Code Cong. & Admin.News, Vol. 3, p. 3925.]

The proviso was approved and it is now 43 U.S.C. § 931d in the exact words as recommended by Justice. Such jealous protection by Congress is relevant herein and is not to be taken lightly because the derogation plaintiff attempts is clearly prohibited by said section 931d.

* * * The general office of a proviso is to except something from the enacting clause, or to qualify and restrain its generality and prevent misinterpretation. * * * [United States v. Morrow, 266 U.S. 531, 534, 45 S.Ct. 173, 174, 69 L.Ed. 425 (1925).]

For the reasons above stated, we deny plaintiff’s motion for summary judgment and allow defendant’s cross motion for summary judgment. Plaintiff’s petition is dismissed. •

      . The case has been appealed by the plaintiff therein to the Ninth Circuit.

      . We disagree with so much of the Ness decision as implies that the court cannot, even when discretion is arbitrarily applied, review the case.

      . Counsel for plaintiff stated in the appeal hearing before the Department as follows:
      “In order to increase the Telephone Company’s capacity to transmit communications, it was and is necessary for it- to increase its investment. Investment and capacity to transmit communications are, therefore, closely related. In the Mt. Lemmon case, the Telephone Company increased its capacity to furnish communication circuits, and consequently its investment on Mt. Lemmon, because it wished to satisfy present and future demands for telephone services.” [Emphasis supplied.]


source: Caselaw Access Project

author: KUNZIG, Judge. SKELTON, Judge

license: Public Domain

text:
    BUTZ ENGINEERING CORPORATION v. The UNITED STATES.
    No. 223-73.
    United States Court of Claims.
    June 19, 1974.

      Marion Edwyn Harrison, Washington, D. C., attorney of record for plaintiff. Harrison, Lucey, Sagle & Salter, Washington, D. C., of counsel.
    Carl Eardley, Sp. Asst. Atty. Gen., with whom was Acting Asst. Atty. Gen. Irving Jaffe, for defendant.
    Before COWEN, Chief Judge, and DAVIS, SKELTON, NICHOLS, KASHIWA, KUNZIG and BENNETT, Judges.
   ON DEFENDANT’S MOTION TO DISMISS OR ALTERNATIVE MOTION FOR SUMMARY JUDGMENT, AND PLAINTIFF'S . CROSS-MOTION FOR SUMMARY JUDGMENT

KUNZIG, Judge.

In this contract claim, the court faces the first test of its jurisdiction over disputes arising from the operation of the United States Postal Service (USPS). While we hold that we have jurisdiction to entertain plaintiff’s suit against the United States for breach of a USPS contract, we conclude that the claim fails on the merits. Accordingly, we grant summary judgment to defendant.

Facts

USPS was created as an “independent establishment of the executive branch of the Government of the United States” to replace the former Post Office Department (POD) by the Postal Reorganization Act of 1970 ' (the Reorganization ' Act). Pub.L. 91-375, Aug. 12, 1970, 84 Stat. 719. The Reorganization Act, which totally revised and reenacted Title 39 of the U.S. Code, became fully effective July 1, 1971. The dispute at bar derives from a 1971 Postal Service contract for the modernization of the Morgan Station Post Office in New York City.

The advertisement for bids contemplated a two-phase contract, phase one covering design and phase two fabrication and installation. Two competing contractors were initially to be awarded identical contracts and allowed to perform phase I. USPS would then evaluate the two designs for technical merit and cost and scheduling requirements, and would presumably allow one contractor to proceed with performance of phase II.

On August 20, 1971, plaintiff entered into Postal Service contract REC 59-72 for phase I of the Morgan Station project. On or about the same date, the Jervis B. Webb Company (Webb) was awarded a virtually identical agreement on the same project. Although both contractors completed timely performance of this competitive phase covering design, USPS ultimately decided not to permit either to proceed with performance of phase II. This development resulted from a decision taken late in the phase I process that the Morgan Station be devoted to letter mail service alone, rather than serve as an all-purpose plant. The project was accordingly turned over to the Corps of Engineers, which did not utilize either contractor’s design.

Alleging breach of contract, plaintiff sues for profits anticipated from performance of phase II, and for unreimbursed phase I costs. Defendant moves to dismiss the petition on the ground that this court lacks jurisdiction over USPS contract claims, or alternatively for summary judgment on the merits. Plaintiff has cross-moved for summary judgment on the merits. For the reasons advanced in the sections which follow, defendant’s motion to dismiss is denied while that for summary judgment is granted.

Jurisdiction

While drawing on specific provisions of the Reorganization Act, defendant’s motion to dismiss is premised largely on the theory that, in replacing the POD with USPS, Congress created a public service which was to be self-supporting and liable for its own contractüal obligations. Although conceding the Postal Service was founded to serve a public-purpose and functions as an instrumentality of the Federal Government, defendant asserts the Reorganization Act requires the present contract claim to be brought against USPS in a federal district court. Plaintiff’s petition champions the view that, while USPS may represent a “new breed of governmental animal,” its obligations fall within the definition of “any express or implied contract with the United States” in this court’s general jurisdictional statute. 28 U.S.C. § 1491 (Supp. II 1972). We assess these contending claims in the light of both the relevant case law and specific provisions of the Reorganization Act.

The Case Law

At hand is not the question of whether, when sued in its own name, USPS may claim the sovereign immunity of its parent government. That general question of agency law, once controversial, has basically been answered in the negative. Keifer & Keifer v. RFC, 306 U.S. 381, 388-389, 392, 394, 59 S.Ct. 516, 83 L.Ed. 784 (1939). Moreover, the Reorganization Act specifically authorizes USPS to “sue and be sued in its official name.” 39 U.S.C. § 401(1). Our problem is instead the converse, continuing one of whether USPS numbers among those subsidiary instrumentalities for whose actions the United States, as principal, has renounced its own immunity.

Judicial efforts to define the scope of defendant’s liability for the actions of the legion of federal agencies and corporations spawned by the needs of the modern welfare state reach back at least a half century. Early recognition of defendant’s liability in a principal capacity employed the rough formula that the subsidiary instrumentality was “acting or professing to act, mediately or immediately, under the authority of the United States.” Ex parte Skinner & Eddy Corp., 265 U.S. 86, 95, 44 S.Ct. 446, 448, 68 L.Ed. 912 (1924). Developing on this view, the Supreme Court more recently remarked:

That the Congress chose to call it a corporation does not alter its characteristics so as to make it something other than what it actually is, an agency selected by the Government to accomplish purely Governmental purposes.

Cherry Cotton Mills, Inc. v. United States, 327 U.S. 536, 539, 66 S.Ct. 729, 730, 90 L.Ed. 835 (1946).

In applying this theory as a basis for its jurisdiction, this court has emphasized that the contract at bar need not expressly describe defendant’s capacity as principal since “[t]he statutes and the purpose for which the [Government] corporation was organized disclosed the agency” relationship. John Morrell & Co. v. United States, 89 Ct.Cl. 167, 169 (1939). See also National Cored Forgings Co. v. United States, 132 F.Supp. 454, 458-459, 132 Ct.Cl. 11, 18-19 (1955).

Most recent and instructive of this line of decisions is National State Bank of Newark v. United States, 357 F.2d 704, 174 Ct.Cl. 872 (1966), a case involving a contractual undertaking of the Federal Housing Administration in which the court construed the Tucker Act to constitute a “broad” waiver of sovereign immunity by the United States. The key to the Newark holding was that, when a federal instrumentality acts within its statutory authority to carry out defendant’s purposes, the United States submits itself to liability under the Tucker Act unless “some specific provision to the contrary” exists. 357 F.2d at 707, 174 Ct.Cl. at 877. In common-sense terms, the object in all such jurisdictional disputes is to determine if the agency in question is “doing work of the government.” 357 F.2d at 708, 174 Ct.Cl. at 879. See Keifer & Keifer v. RFC, supra, 306 U.S. at 389, 59 S.Ct. 516. We may, then, fairly summarize that, where the agency whose operations are in dispute concededly functions as an instrumentality of the Federal Government, the burden is on defendant to demonstrate that this court is without jurisdiction to hear the claim.

While jurisdiction under the Tucker Act over USPS activities has not been litigated prior to this suit, the case law concerning the relationship between USPS and defendant in other frameworks is largely inconclusive. Compare Detroit Window Cleaners Local 139 Insurance Fund v. Griffin, 345 F.Supp. 1343 (E.D.Mich.1972), and Lawhorn v. Lawhorn, 351 F.Supp. 1399 (S.D.W.Va.1972), with White v. Bloomberg, 345 F.Supp. 133 (D.Md.1972), and Leonard v. United States Postal Service, 360 F.Supp. 449 (D.Mass.1973), aff’d 489 F.2d 814 (1st Cir. 1974). Thus, meaningful application of our jurisdictional formulae to the present case requires, as defendant urges, consideration of the statutory provisions at hand.

The Reorganization Act

No compelling indication of Congressional intent concerning defendant’s role as principal to the actions of USPS emerges from the Reorganization Act’s specific provisions. The statutory pattern is sufficiently clear, however, to demonstrate that defendant has failed to carry its burden of proving, under the circumstances, the United States is not an appropriate party to this suit.

Defendant relies too heavily on the theoretical postulate that Congress’ design to establish the Postal Service on a self-supporting basis as an efficient business, see 39 U.S.C. §§ 2002, 2003, 2005, 3621, cast USPS totally out of its predecessor’s niche in the federal establishment. To begin with, the premise is a dubious one.. Congress has wide discretion to endow a governmental agency with any combination of powers and immunities as it sees fit. See FHA v. Burr, 309 U.S. 242, 244, 60 S.Ct. 488, 84 L.Ed. 724 (1940); Monolith Portland Midwest Co. v. RFC, 178 F.2d 854, 858 (9th Cir. 1949), cert. denied, 339 U.S. 932, 70 S.Ct. 668, 94 L.Ed. 1352 (1950). Whether a governmental corporation, agency, or other type of instrumentality is administered by sound commercial practices or as a bureaucratic boondoggle need not affect the legal status of the entity.

The relevant legislative history indicates that, while Congress was basically concerned with reorienting national postal service on a basis of greater efficiency and self-sufficiency, it in no way intended to strip an overhauled POD of its public service character. Nowhere is mention made of decreased legal responsibility of the United States as a result of postal service revision. Express purposes for reform included (1) reducing political pressure in order to inspire a more business-like approach to postal service; (2) providing a framework for collective bargaining by postal employees; (3) affording postal employees an opportunity for higher pay and faster advancement than other government officials. 1970 U.C.Code Cong. & Admin.News pp. 3649, 3650. While the role of Congress in daily postal affairs was to be reduced and responsibility in this field consolidated, it was never suggested that USPS would be less a governmental institution than POD had been. See id. at 3653-54; S.Comm. on Post Office and Civil Service, 93D Cong., 1st Sess., Explanation of the Postal Reorganization Act and Selected Background Materials 167-68 (Comm. Print 1973). The House Post Office and Civil Service Committee reported:

The Postal Service is — first, last and always — a public service. [The Reorganization Act] is designed to prevent public service from involving public wastefulness in postal matters.

1970 U.S.Code Cong. & Admin.News p. 3668.

In this connection, under section 208 of the Reorganization Act, Congress reserved the power to “alter, amend, or repeal any or all of the sections of this title * * * .” Although the postal deficit is to be eliminated by January 1, 1978, it is frankly anticipated that USPS will remain perpetually dependent on Congressional appropriation for some share of its revenue needs. 1970 U.S.Code Cong. & Admin.News p. 3659; Hearings Before the S. Comm, on Post Office and Civil Service on Reorganization of the Postal Establishment to Provide for Efficient and Economical Postal Service, 91st Cong., 1st Sess. 274 (1969) {Hearings). Former Postmaster General Winton ■Blount testified during Senate consideration of the Reorganization Act that USPS would come to Congress for support should it not be self-sustaining after 1978. Hearings at 288. And, discussing the transfer of assets from POD to USPS, he remarked: '

We are not disposing of this asset to another company, or, if you will, to another ehtity. We are just changing the form of our organization, and the organization is still owned by the Federal Government.

Hearings at 290.

Particuldrly revealing of Congress’ intent to mdintain USPS as an integral entity of the federal establishment, while enabling it to function as an efficient enterprise, are two introductory articles of the Reorganization Act. Section 101(a) recites in part:

The United States Postal Service shall be operated as a basic and fundamental service provided to the people by the Government of the United States, authorized by the Constitution, created by Act of Congress, and supported by the people * * * .

We are mindful of Congress’ invocation in this section of its power under Article I, section 8, clause 7 of the Constitution to legislate postal services.

Section 201 of the Reorganization Act goes on to define USPS as “an independent establishment of the executive branch of the Government of the United States” [emphasis added]. We find significant in this connection the general definitional section of the Judicial Code, 28 U.S.C. § 451 (1970), which reads in part:

The term “agency” includes any * * * independent establishment * * * of the United States * * * unless the context shows that such term was intended to be used in a more limited sense.

Use has been made of this provision by federal courts to take jurisdiction over claims concerning other agencies on the ground that the United States is involved in some principal capacity. Acron Investments, Inc. v. Federal Savings & Loan Insurance Corp., 363 F.2d 236 (9th Cir.), cert. denied, 385 U.S. 970, 87 S.Ct. 506, 17 L.Ed.2d 434 (1966). See also Greider v. Woods, 177 F.2d 1016, 1018 (10th Cir. 1949) (the Housing Expediter). •

Congress has shown it is capable of unequivocally cleaving a public service or corporation from all governmental nexus when it so desires. In establishing the Securities Investors Protection Corporation, for instance, the legislature bluntly directed that the corporation “shall not be an agency or establishment of the United States Government * * 15 U.S.C. § 78ccc(a)(1) (1970).

By contrast, the context of the Reorganization Act does not require a limited reading of the term “independent establishment” for our jurisdictional purposes. Indeed, section 6(i)(3) of the Reorganization Act specifically amends 31 U.S.C. § 724a, governing payment of judgments against defendant, to read:

Notwithstanding the other provisions of this section, judgments against the United States arising out of activities of the ' United States Postal Service shall be paid by the Postal Service out of any funds available to it.

The inference is inescapable that jurisdiction exists to award such judgments against the United States. Defendant urges the provision be narrowly construed to cover only instances in which United States’ liability is provided for in other sections of the Reorganization Act, such as that conferring the power of eminent domain on USPS. 39 U.S.C. § 401(9). The broad terms of 31 U.S.C. § 724a, however, suggest no basis for such a restricted reading. All USPS “activities” are seemingly covered.

We are not moved by defendant’s argument that USPS must be sued in its own name for its contractual obligations since Congress has directed judgment payments are to be made only from separate Postal Service funds and has not appropriated general funds for that purpose. We first note that Congress has, in fact, expressly exercised its appropriating power in defining the funds USPS, even in its anticipated role of basic self-sufficiency, is to utilize. 39 U.S.C. § 2401(a). See also, 39 U.S.C. § 2003. Thus, the line of decisions holding the United States not liable for its non-appropriated fund activities is without relevance since the requirement of 28 U.S.C. § 2517 that judgments against defendant be “paid out of any general appropriation therefor” is satisfied by the terms of the Reorganization Act. See Kyer v. United States, 369 F.2d 714, 718, 177 Ct.Cl. 747, 751 (1966), cert. denied, 387 U.S. 929, 87 S.Ct. 2050, 18 L.Ed.2d 990 (1967).

Especially telling in this regard is the fact that Congress had long directed in the introductory sentence to 31 U.S.C. § 724a that judgments against the United States for obligations of the POD were to be paid out of POD funds. Even if execution on such a judgment proved futile due to exhaustion of USPS funds, the procedure authorized under amended 31 U.S.C. § 724a would be no less valid since petitioner obtains its right to sue from Congress and, hence, must take it subject to such restrictions as have been imposed. FHA v. Burr, supra, 309 U.S. at 251, 60 S.Ct. 488.

Support for this construction of amended 31 U.S.C. § 724a is found in Reorganization Act section 409(a), where the federal district courts are conferred “original but not exclusive jurisdiction” over actions against USPS. At oral argument, it was brought out that the original version of this section included jurisdiction in the Court of ■Claims, but the legislative history reveals no explanation as to why such provision was ultimately deleted. The court gleans from this background the conclusion that the legislative drafters considered the provision redundant in section 409(a) since the Court of Claims already exercises comparable jurisdiction under the Tucker Act.

Further evidence for the conclusion that the United States was to continue responsible for USPS activities is found in the remaining sections of article 409: (b) directing that the procedural rules for suits involving USPS be those employed in suits involving the United States; (c) applying the Federal Tort Claims Act (FTCA) to USPS activities; and (d) calling on the Department of Justice to furnish legal representation to USPS as it may require. See also 39 U.S.C. § 2605. Finally, it is well settled that an agency’s “sue-and-be-sued” clause does not nullify the concurrent liability of the United States as principal. National State Bank of Newark v. United States, supra, 357 F.2d at 711, 174 Ct.Cl. at 884; Korman v. FHA, 72 App.D.C. 245, 113 F.2d 743, 746-747 (1940). See also Sloan Shipyards Corp. v. U. S. Fleet Corp., 258 U.S. 549, 567-568, 42 S.Ct. 386, 66 L.Ed. 762 (1922).

Other capacities of USPS under revised Title 39 which defendant concedes are “not normally found in strictly commercial companies,” see National State Bank of Newark v. United States, supra, 357 F.2d at 708, 174 Ct.Cl. at 879, 870 include:

Section 401(9) — to exercise eminent domain and to have the priority of the United States with respect to payments of debts out of bankrupt, insolvent, and decedents’ estates;

Section 404(7) — to investigate postal offenses and civil matters relating to postal service;

Section 404(8) — to offer and pay rewards for information and services in connection with violations of postal laws;

Section 405(a) — to require the Public Printer to print certain matters;

Section 407(a) — to negotiate treaties with approval of the President;

Sections 3006, 3008 — to prohibit pandering through the mails and administratively to prosecute for the mailing of pornography;

Sections 5206, 5403, 5604 — to impose fines on surface, air and ocean carriers of mail.

In addition:

Section 1001(b) — With certain exceptions, Postal Service employees shall be considered part of Civil Service;

Section 2003 — The USPS revolving fund in the Treasury shall be composed of both its own earned monies and Congressional appropriations;

Section 2005(d)(3) — Postal Service obligations issued are acceptable as security for obligations of the United States;

Section 2008(a) — The General Accounting Office (GAO) audits USPS;

Section 2009 — USPS must submit its budget for approval to the Office of Management and Budget;

Section 2402 — The Postmaster General shall report annually to the President and to Congress;

Section 2601 (a)- — GAO may collect uncollectable USPS accounts.

This is not to say that defendant is unable to cite articles of the Reorganization Act to support its contention that Congress founded USPS as an entity beyond the traditional pale of the federal establishment. But, as suggested above, such provisions are unable to outweigh the more convincing indicia of Congressional intent marshalled by plaintiff.

Most impressive of the elements in defendant’s arsenal is 39 U.S.C. § 410(a), directing that “no Federal law1 dealing with public or Federal contracts, property, works, officers, employees, budgets or funds * * * shall, apply to the exercise of the powers of the Postal Service.” See also 39 U.S.C. § 401(3), authorizing USPS to enter into and perform its own contracts. Defendant urges that these articles, read in conjunction with the explicit provision in 39 U.S.C. § 409(c) for the FTCA to apply to USPS activities, divest the courts of jurisdiction over the United States for USPS contract claims. Section 410(a), however, appears to refer not to procedure and jurisdiction but to the Postal Service’s discretion to contract according to its own needs and regulations. Indeed, this effort to enable USPS to function as a business enterprise meets substantial qualification in subsection (b) of the provision, where many of the standard statutory requirements of government contracting are made applicable to postal undertakings. Moreover, defendant’s effort to draw a negative inference from the lack of a provision for contract suits correlative to that for tort claims is unjustified. Congress might have considered it unnecessary to provide expressly for contract litigation in the Court of Claims because of the obvious impact of amended 31 U.S.C. § 724a.

Similarly, those provisions empowering USPS administratively to settle and compromise claims against itself, 39 U. S.C. §§ 401(8), 2008(c), 2601(b)(2), 2603, rather than leave such responsibility to .the GAO, see 31 U.S.C. §§ 71-74 (1970), Comptroller General Opinion Letter B — 164786, Oct. 8, 1970, do not speak to the issue of court jurisdiction to resolve such disputes. Language in Leonard v. United States Postal Service, supra, that the settlement articles demonstrate Congressional intent to create a Postal Service independent of the Executive Branch, constitutes dictum since that case required only a construction of the plain meaning of 39 U.S.C. § 2008(c).

Defendant further asserts that 39 U. S.C. § 2002(a)(2) represents a Congressional effort to extricate the United States from liability for USPS activities. While this construction is a reasonable one, the context of the Reorganization Act as a whole indicates the Congress was more concerned in this provision with preserving the assets of the fledgling Postal Service than in affecting defendant’s liability as principal. Subsection (d) of the article goes on to indicate USPS is, in terms of working capital, to serve as an integral element within the federal bureaucracy.

Finally, sections 3206 and 3216 of the revised title, concerning reimbursement for sharing of federal property among agencies and payment by other agencies for the franking privilege, in no way constitute a break with the past in terms of postal operations. These two sections merely adopt the language and substance of former 39 U.S.C. §§ 4156 and 4167, respectively.

Defendant also relies heavily on two federal court decisions, both distinguishable. The recent decision in White v. Bloomberg, supra, that the Reorganization Act gives the Court of Claims no jurisdiction in USPS pay cases, is at first blush squarely on point for defendant. 345 F.Supp. at 142-143. However, because the United States was not a named defendant and the district court could there have merely determined it had jurisdiction under the plain wording of 39 U.S.C. § 409(a), we choose to disregard most of the language upon which defendant relies as lengthy dicta.

More troublesome is defendant’s citation of Abbott v. United States, 112 F.Supp. 801, 125 Ct.Cl. 330 (1953), where the court held it was without jurisdiction to hear a petition against the Panama Canal Company (PCC), which had been expressly created as an “agency or instrumentality” of the United States and could “sue and be sued in its official name.” The court there emphasized that the business purposes for which PCC was formed were strong evidence that “Congress seems to have wanted to cut it loose from the United States as far as possible.” 112 F.Supp. at 804, 125 Ct.Cl. at 335. The court observed that the Panama Canal Company Act did not expressly oust the Court of Claims of jurisdiction, but that other factors must be weighed to determine defendant’s liability as principal.

That case, however, was a pay suit, and PCC employees, unlike those of USPS, are not considered part of Civil Service. In addition, 5 U.S.C. § 5102(a) (1) (G) (vii) (1970) excludes PCC from the definition of “agency” for purposes of the Classification Act, while USPS is not so excluded. It is also to be noted that Congress selected a “public establishment” format for USPS, rather than the corporate form originally suggested for it and which the PCC represents. More importantly, however, Abbott represents a restricted reading of Tucker Act jurisdiction which appears out of keeping with the ease law standard described above and, hence, should probably be contained to its facts.

In summary, it cannot be denied that Congress in the Reorganization Act has limited the degree of defendant’s control of USPS financial responsibilities, an important criterion in past jurisdictional cases of this nature. See Cherry Cotton Mills, Inc. v. United States, supra; Crooks Terminal Warehouses, Inc. v. United States, 92 Ct.Cl. 401 (1941). However, the most important characteristic giving rise to liability on the part of the United States, which is here satisfied, is that USPS was “created solely to perform governmental objectives and it so acted * * Crooks Terminal Warehouses, Inc. v. United States, supra at 414.

The result thus reached is not startling ; no adverse impact on the functioning of USPS is hereby engendered since the Postal Service could always be sued in district court. Cf. FHA v. Burr, supra, 309 U.S. at 245, 60 S.Ct. 488. Defendant conceded at oral argument that its jurisdictional challenge was largely a “matter of principle.”

Furthermore, to deny jurisdiction in this case would be to shut the door of the Court of Claims on an important aspect of government contract law, thereby encouraging an unnecessary bifurcation in the future development of this law. Such- “Congressional idiosyncrasy” is not lightly inferred. Keifer & Keifer v. RFC, supra, 306 U.S. at 393, 59 S.Ct. 516.

Finally, our perception of the present petition might be different had it appeared a shallow exploitation of the deep-pocket theory. Instead, however, it constitutes a legitimate use of an alternative forum for suits against the sovereign. Payment of any judgment must be made from available USPS funds alone. Defendant on numerous occasions benefits from the principal-agency theory in the arena of federal jurisdictional disputes. See Cherry Cotton Mills, Inc. v. United States, supra; Acron Investments, Inc. v. Federal Savings & Loan Insurance Corp., supra; Korman v. FHA, supra; Greider v. Woods, supra. Common fairness demands that it accept the responsibilities of this judicial concept, in return.

Breach Claim

Having taken some pain to explicate our basis of jurisdiction in this case, we find the merits of the present claim warrant, unhappily for plaintiff, only summary treatment. No material factual controversy existing, the parties have lodged cross-motions for summary judgment. We hold for defendant.

Plaintiff’s petition asserts that defendant breached the Morgan Station contract by refusing to allow plaintiff to proceed with phase II of the undertaking, involving execution and installation of the design produced under phase I. Plaintiff contends that defendant could abort performance of phase II only by formally invoking the contract’s standard termination-for-convenience clause. Defendant counters, and we agree, that the explicit terms of Postal Service contract REC 59-72 make clear that the parties undertook performance only of phase I.

The contract’s “Schedule of work” recites the contractor’s objective of both developing designs for the Morgan Station, and fabricating and installing the proposed modernization system. It then goes on to describe in detail both phases of projected work. In paragraph C of the “Additional Provisions,” however, the parties agree:

Although, the Schedule of Work is written for two phases, this contract, as executed, is for work to be performed under Phase I only. Within 30 days after completion of the Phase I work, the parties may at the option of the United States Postal Service enter into negotiations for the performance of the Phase II work [emphasis added].

It would be difficult to imagine a more direct statement by the parties as to the scope of their agreement, and plaintiff is bound by it.

Plaintiff asserts the contract as a whole is ambiguous and must be interpreted in the light of the parties’ alleged prior understanding that defendant would be contractually bound to allow the party with the superior modernization design to proceed with phase II. This contention, however, flies in the face of the parol evidence rule, by which all negotiations prior and contemporary to the writing of a contract are considered merged in, and cannot amend or add to, the written terms of the document. Brawley v. United States, 96 U.S. (6 Otto) 168, 173-174, 24 L.Ed. 622 (1878); Baggett Transportation Co. v. United States, 319 F.2d 864, 868, 162 Ct.Cl. 570, 577 (1963). Because the written terms here in question are on their face unambiguous, no legitimate purpose exists for introducing evidence of such prior negotiations and understandings. Sylvania Electric Products, Inc. v. United States, 458 F.2d 994, 1005-1006, 198 Ct.Cl. 106, 126-128 (1972). Thus, plaintiff at best can be said to have contracted for a chance to negotiate for the phase II work together with Webb.

Even were plaintiff to be considered an unsuccessful bidder for the phase II work, a role which it disclaims, no adequate claim for damages would be made out. No allegation of “bad faith or lack of reasonable basis” has been advanced for defendant’s decision not to allow either phase I contractor to proceed with phase II. See Keco Industries, Inc. v. United States, 492 F.2d 1200, 1203-1204, 203 Ct.Cl. —, — (1974). Typically, the Government contracting authority retains the prerogative to reject all bids without liability, Robert F. Simmons & Assocs. v. United States, 360 F.2d 962, 175 Ct.Cl. 510, 512 (1966), and defendant’s purpose in rejecting both candidates for phase II work here was prima fade reasonable. See Keco Industries, Inc. v. United States, supra, 492 F.2d at 1204, 203 Ct.Cl. at —.

Nor has, plaintiff produced any support for its assertion that defendant was required to operate by means of formal termination-for-convenience. Indeed, plaintiff has failed to produce one statute, regulation, contract provision, or judicial opinion to support its position on the merits. As a matter of law, then, it has no substantive claim.

Accordingly, defendant’s motion to dismiss is denied; defendant’s alternative motion for summary judgment is granted; plaintiff’s cross-motion for summary judgment is denied; and the petition is dismissed.

SKELTON, Judge

(concurring and dissenting):

I concur with the result reached by the majority that plaintiff is not entitled to recover and its petition should be dismissed.

However, I feel that notwithstanding the commendable study and • detailed treatment of the jurisdictional question in the majority opinion written by Judge Kunzig, I am compelled to dissent with regard to this question. In my opinion, we do not’ have jurisdiction of suits against the United States Postal Service (USPS). The Reorganization Act, 39 U.S.C. § 101 et seq., provided in unequivocal terms that United States District Courts shall have original jurisdiction of all actions brought against the Postal Service. In this regard, the Act provides as follows:

.§ 409. Suits by and against the Postal Service.
(a) Except as provided in section 3628 of this title, [not pertinent here] the United, States district courts shall have original but not exclusive jurisdiction over all actions brought by or against the Postal Service. Any action brought in a State court to which the Postal Service is a party may be removed to the appropriate United States district court under the provisions of chapter 89 of title 28. [39 U.S.C. § 409(a) (1970)]

It is clear that the words “but not exclusive jurisdiction” in the Act refers to suits filed in State courts where concurrent jurisdiction exists unless they are removed to United States District Courts. The Act nowhere vests jurisdiction in the United States Court of Claims. As a matter of fact, as pointed out by the majority, the legislative history of the Act shows that at one point, jurisdiction was conferred on the U.S. Court of Claims, but this provision was removed before final passage. This incident is significant, but we need only to rely on the provision of the Act as finally passed, which is quoted above, showing that this court does not have jurisdiction of suits against the Postal Service.

Furthermore, a claim against the Postal Service is not a claim against the United States. See White v. Bloomberg, 345 F.Supp. 133, 142 (D.Md.1972). In that case the court said that the United States Postal Service:

[I] s an establishment existing independently of the executive branch of the United States with the power “to sue and be sued in its official name.” * * * A suit against it, * * * for back pay is not a claim against the United States within the meaning of 28 U.S.C. § 1346(a)(2). * * * [Footnotes omitted]

No other case has. been cited that bears directly on the question under discussion.

However, the case of Abbott v. United States, 112 F.Supp. 801, 125 Ct.Cl. 330 (1953) involved facts that closely resemble those in the instant case. In that case the Panama Canal, which was a government operation, was incorporated by statute as the Panama Canal.Company. Various employees sued the United States in this court to recover wages for services rendered both before and after the company was incorporated. The government challenged the court’s jurisdiction. The court held this court had no jurisdiction for claims for services rendered after the creation of the corporation. The court held:

* * * Any such Government corporation, in all its transactions, in a sense acts as the agent of the Government. But in the instant case, the purpose of the transfer of the Canal to the corporation was to put it under such management and accounting practices that it could be made to pay its own way. Congress seems to have wanted to cut it loose from the United States as far as possible. In employing these plaintiffs after July 31, 1951, the corporation was getting the corporate business done, and was not merely hiring employees as the agent of the United States.
We recognize, of course, that these corporations wholly owned by the Government are hybrid creatures, and that if the equivocal nature of such creatures resulted in fraud upon or other abuse of outside persons, a court would look through the corporate fiction and place liability upon the real principal. * * *
The instant case presents no necessity for piercing the corporate veil in order to do justice. The plaintiffs have, in our opinion, another forum in which to sue, and it is no great hardship for them to have to seek their relief there. [Id. 112 F.Supp. at 804, 12 Ct.Cl. at 335.]

See also Zimberg v. United States, 177 Ct.Cl. 1104 (1966); and Payne v. United States, 179 Ct.Cl. 923 (1967), where this court reaffirmed its decision in the Abbott case. It should be pointed out that the Act creating the Panama Canal Company provided that it could be sued in its corporate name. 62 Stat. 1078. We find that in the instant case the statute authorizes suits against the Postal Service in its official name. 39 U.S.C. § 401(1). It appears that Congress intended that the Postal Service would be responsible for claims against it.and that such claims would not be claims against the United States. It follows that if a claim is not against the United States, this court does not have jurisdiction of the claim.

The fact that the government furnished money for the operation of the Postal Service does not make it liable nor responsible for the debts and obligations of the Postal Service nor for claims against it. See D. R. Smalley & Sons, Inc. v. United States, 372 F.2d 505, 178 Ct.Cl. 593, cert. denied, 389 U.S. 835, 88 S.Ct. 45, 19 L.Ed.2d 97 (1967).

This court does not have jurisdiction of plaintiff’s suit because plaintiff’s claim is against the Postal Service and not against the United States, and exclusive jurisdiction of such claims has been conferred by Congress on the district courts.

I would dismiss plaintiff’s petition on the ground of lack of jurisdiction in this court.

NICHOLS, J., joins in Judge Skelton’s dissent.

      . The Act also established a separate Postal Rate Commission. 39 U.S.C. § 3601. All references to Title 39 are to the version as revised and reenacted by the Reorganization Act.

      . We consider without substance plaintiff’s suggestion that defendant’s liability is governed by the form used to execute the subject contract. Because the agreement was entered into in August 1971, shortly after USPS began operation, the contracting officer used an old POD procurement form, which recited in article 16 that the undertaking was between plaintiff and “the United' States of America, hereinafter called the Government.” Regulations published in the Federal Register at the time USPS went into operation (prior to the daté of contract) explicitly directed that all POD procurement forms were amended by substituting USPS for the United States, and that. this amendment was incorporated by reference into all USPS contracts. Procurement of Property and Services: Interim Regulations, June 30, 1971, § 8, 36 Fed.Reg. 12451, 12453. Since this regulation was specifically identified in article 15 of the contract, it may not be denied that the agreement was amended accordingly. Even were' it not so identified, there is ample authority that plaintiff would have been on constructive notice of its effect. Federal Crop Insurance Corp. v. Merrill, 332 U.S. 380, 384, 68 S.Ct. 1, 92 L.Ed. 10 (1947) ; Porter v. United States, Ct.Cl., 496 F.2d 583 (decided May 15, 1974).

      . Also falling within this line of eases construing the expanse of the Tucker Act is Abbott v. United States, 112 F.Supp. 801, 125 Ct.Cl. 330 (1953). That decision, however, represents a mild deviation in the general development of the law on this subject, and is discussed infra.

        . We put to one side, in this connection, the similar yet distinguishable line of cases involving the court’s jurisdiction over undertakings by entities not formally a part of the federal establishment. See Housing Corp. of America v. United States, 468 F.2d 922, 199 Ct.Cl. 705 (1972) (federally-financed city housing commission) ; D. R. Smalley & Sons, Inc. v. United States, 372 F.2d 505, 178 Ct.Cl. 593, cert. denied, 389 U.S. 835, 88 S.Ct. 45, 19 L.Ed.2d 97 (1967) (State of Ohio); Pulaski Cab Co. v. United States, 157 F.Supp. 955, 141 Ct.Cl. 160 (1958) (military base exchange).

      . And in United States district court.

      . In this connection, see Association of American Publishers, Inc. v. Governors of United States Postal Service, 157 U.S.App.D.C. 397, 485 F.2d 768 (1973), in which the court comments, at 771, that the sue-and-be-sued clause is a provision common to “administrative agencies” such as the Federal Reserve Board, ICG, FTC, NLRB and SEC, for whose actions the United States remains liable as principal.

      . All liabilities attributable to operations of the former Post Office Department shall remain liabilities of the Government of the United States, except that upon commencement of operations of the Postal Service, the unexpended balances of appropriations made to, held or used by, or available to the former Post Office Department and all liabilities chargeable thereto shall become assets and liabilities, respectively, of the Postal Service.

      . Defendant initially argued that plaintiff’s signing of a release on January 11, 1972, as a condition precedent to final payment for phase I performance barred its claim to rights under phase II. This contention, however, has been withdrawn. Nevertheless, the release is binding, as plaintiff admits, for those matters it concededly covers, viz, claims under phase I. J. G. Watts Construction Co. v. United States, 161 Ct.Cl. 801, 805 (1963). No allegation has been made that the release was signed under duress or treated by the parties as ineffective, see Winn-Senter Construction Co. v. United States, 75 F.Supp. 255, 260, 110 Ct.Cl. 34, 65-66 (1948), or that it was not supported by consideration, Paccon, Inc. v. United States, 399 F.2d 162, 172, 185 Ct.Cl. 24, 41 (1968). Accordingly, plaintiff’s claim here for an additional payment of $68,910.91 for its phase I work is groundless.

      . Indeed, evidence of negotiations leading to the final wording of paragraph C appears further to undermine plaintiff’s position. Paragraph C originally included a guaranteed phase II fee of 7.8% up to a certain limit. This provision was dropped in the final version of the paragraph and replaced by a stipulation for a negotiated phase II fee. This background further supports the paragraph’s plain meaning that phase II work was to be treated as a project separate from phase I for contract purposes.


author: PER CURIAM:

text:
    Darrick W. JONES v. The UNITED STATES.
    No. 435-73.
    United States Court of Claims.
    July 19, 1974.
    J. Francis Pohlhaus, Washington, D. G., attorney of record, for plaintiff. Nathaniel R. Jones, NAACP, New York City, of counsel.
    Frances L. Nunn, Washington, D. C., Asst. Atty. Gen. Carla A. Hills, for defendant.
    Before COWEN, Chief Judge, and DAVIS, SKELTON, NICHOLS, KASHIWA, KUNZIG, and BENNETT, Judges.
   ON DEFENDANT’S MOTION TO DISMISS THE PETITION

PER CURIAM:

In 1972 plaintiff was serving as a Marine Corps lance corporal at the Marine Corps Base, Quantico, Virginia. In November of that year he was found guilty by a special court-martial of violations of Article 91 of the Uniform Code of Military Justice (wilful disobedience of the lawful order of a superior noncommissioned officer) and of Article 92 (failure to obey a lawful order of a military policeman). He was sentenced to forfeiture of $40 pay for one month and restriction for 14 days. The convening authority (the Commanding Officer, Service Battalion, Marine Corps Base, Quantico) approved the findings, but only so much of the sentence as provided for forfeiture of $40 pay for one month.

Plaintiff then applied for review, under Article 69 of the Uniform Code, 10 U.S.C. § 869, to the Judge Advocate General of the Navy, asserting (as the main ground) that the court-martial lacked jurisdiction because the involvement of the convening authority in the court-martial process, as contemplated and sanctioned by the Uniform Code, deprived the serviceman of constitutional due process. The Judge Advocate General denied any relief. No further review was possible within the military system, at plaintiff’s instance, because of the smallness of the punishment.

The petition in this court asserts that plaintiff’s “conviction and sentence are illegal, unconstitutional, null and void for the reason that the court-martial lacked jurisdiction to try him, because the provisions of the Uniform Code of Military Justice that assign multiple roles to the convening authority in the initiation, prosecution and review of courts martial are unconstitutional in that they deprive military defendants of the possibility of fair and impartial trials and thereby deprive them of due process of law in violation of the Fifth Amendment.” The relief sought is a judgment for $40 “and an order from this Court to the Secretary of the Navy directing him to expunge or have expunged from his [plaintiff’s] naval records any reference to the court martial * *

As spelled out in brief and argument, the claim is that Congress acted unconstitutionally in the Uniform Code when it combined in the convening authority the powers to (1) select the members of the court-martial (Art. 25(d)(2), 10 U.S.C. § 825(d)(2)); (2) to detail the military judge (Art. 26(a), 10 U.S.C. § 826 (a)); (3) to detail the trial counsel and defense counsel (Art. 27(a), 10 U.S.C. § 827(a)); (4) to refer the charges to the court-martial (cf. Art. 19, 10 U.S.C. § 819; Art. 23, 10 U.S.C. § 823, Art. 30, 10 U.S.C. § 830; Art. 34, 10 U.S.C. § 834); (4) to review the court-martial record and take action thereon (Art. 60, 10 U.S.C. § 860); (5) to return for reconsideration and appropriate action specifications dismissed without a'finding of not guilty (Art. 62(a), 10 U.S.C. § 862(a)); and (6) to approve or disapprove the findings and sentence (Art. 64, 10 U.S.C. § 864) , Plaintiff’s brief sums up his challenge in this way: “In effect the convening authority acts as grand jury, selector of the trial court, trial judge and jury and as trial court and appellate court (in that on review he retries both the facts and .law).”

Defendant has moved to dismiss the petition, asserting both the validity of these provisions of the Uniform Code and the lack of jurisdiction in this court to hold otherwise. We grant the Government’s motion on the twin grounds that (a) the challenged legislation is not unconstitutional on its face or in every case, and (b) on the presentation made, we cannot say that it is invalid as applied to this plaintiff.

All that we have in this particular case is a single pay forfeiture of $40, unaccompanied by imprisonment or any other penalty. Plaintiff does not claim any unfairness or error in the proceedings, the findings, or the sentence — other than the use of the general system, prescribed by the Code, pivoting around the convening authority. Moreover, plaintiff does not ask for or desire a trial to show either that the use of this general system led to unjust or unfair proceedings or an unjust or unfair result in his particular ease or that the general system has a tendency to lead to unfair or unjust proceedings or results. Nor has plaintiff given us any materials or information raising a triable issue as to either of those questions. We lack, in addition, relevant information as to the actual operation of the challenged Code provisions in this case, or generally. We are simply left with the bare provisions of the Uniform Code and asked to hold invalid any and every court-martial trial conducted under their aegis.

We cannot take that step because we do not believe that, on what we have before us, there was any invalidity in this case. The convening authority’s role does'not lead to a violation of due process where the ultimate sentence was no more than a forfeiture of $40 of pay, and there is no showing of unfairness in proceedings or result. In all probability it would be constitutional for Congress to permit a minor penalty of this kind to be imposed, even without the serviceman’s consent, by a form of “company punishment”, i. e. by the immediate commander. Cf. Art. 15, UCMJ, 10 U.S.C. § 815; Argersinger v. Hamlin, 407 U.S. 25, 92 S.Ct. 2006, 32 L.Ed.2d 530 (1972); Daigle v. Warner, 490 F.2d 358 (C.A.9, 1973). At any rate, the interests at stake in this specific case, while not trivial, are at a relatively low level and the convening authority’s multiple roles (absent some special showing) do not evoke the consti-. tutional standards of unfairness for military trials. Cf. Parker v. Levy, — U.S. —, 94 S.Ct. 2547, 41 L.Ed.2d 439, decided June 19, 1974, Part II of the opinion; United States v. Augenblick, 393 U.S. 348, 89 S.Ct. 528, 21 L.Ed.2d 537 (1969).

In disposing of this litigation, we do not decide any different case, one way or the other. We neither determine nor imply that a challenge of this sort would be valid in a case with a heavier sentence or a more detailed factual showing, nor do we decide or imply the contrary. Though we necessarily hold that the Code provisions are not invalid on their face in every case, the only particular ease we determine is the one before us. If others come to judgment in this court, they will be resolved after taking into account their facts and the record then made. Cf. Daigle v. Warner, supra, 490 F.2d 358 (C.A.9, 1973).

The defendant’s motion to dismiss is granted and the petition is dismissed.

      . Findings of not guilty cannot be overturned and the severity of the sentence cannot be increased (unless the prescribed sentence is mandatory). Art. 62(b), 10 U.S.C. § 862(b).

      . We do not even have firm information as to the method of selection of the court-martial members (except that plaintiff did not ask for enlisted personnel) or the military area from which they were chosen, or whether the trial and defense counsel and the military judge were in fact selected by the convening authority or by some other officer or command.


text:
    The McCARTY CORPORATION v. The UNITED STATES.
    No. 282-72.
    United States Court of Claims.
    June 19, 1974.

      William D. Bryce, Austin, Tex., attorney of record, for plaintiff.
    Thomas W. Petersen, Washington, D. C., with whom was Asst. Atty. Gen. Carla A. Hills, for defendant.
    Before CO WEN, Chief Judge, and SKELTON and KUNZIG, Judges.
   OPINION

PER CURIAM:

This case comes before the court on defendant’s exceptions to the recommended decision filed by Senior Trial Judge Mastín G. White on September 21, 1973 pursuant to Rule 134(h). .The court has considered the case on the briefs and oral argument of counsel. Since the court agrees with the decision, as hereinafter set forth, it hereby affirms and adopts the same as the basis for its judgment in this case. Therefore, it is concluded that plaintiff is entitled to recover and judgment is entered that plaintiff recover of and from the United States the sum of four thousand two hundred dollars ($4,200).

OPINION OF TRIAL JUDGE

WHITE, Senior Trial Judge: The petition in this case alleges that the defendant (acting through the Corps of Engineers, U.S. Army) wrongfully awarded to a third party, Morris Plumbing Company, Inc., a contract for the performance of certain construction work and the air-conditioning of 32 existing dormitories for airmen at Sheppard Air Force Base, Texas; that the contract should have been awarded to the plaintiff; and that the plaintiff sustained damages as a result of the defendant’s wrongful action.

Bids on the work referred to in the preceding paragraph were solicited in an invitation for bids (“IFB”) which the Fort Worth District of the Corps of Engineers issued on January 21, 1971. The IFB called for itemized bids on three separate items of work and for a total bid; and prospective bidders were informed that they must bid on all three items. Item 1 was described in the IFB as “Central Chilling Plant Building, complete”; item 2 was described as “Air Conditioning for 32 existing buildings”; and item 3 was described as “Grading, Paving, Sidewalks, Utilities, Establishment of Turf, and all other work not separately listed.”

The plaintiff was one of 11 companies that submitted bids in response to the IFB. Prior to the submission of the plaintiff’s bid, the plaintiff’s president, W. H. McCarty, instructed a subordinate, Luther J. Martin, to prepare the bid on behalf of the plaintiff by entering on the bid form the figure $140,000 for item 1, the figure $434,000.for item 2, the figure $100,000 for item 3, and the figure $674,000 for the total of the bid. However, Mr. Martin made the mistake of transposing two of the digits in the amount of the bid on item 2, with the result that the figure actually entered on the bid form for item 2 was $443,000 rather than $434,000. All the other figures which Mr. Martin entered on the bid form were in accordance with Mr. McCarty’s instructions, including $674,000 as the total of the bid. (Because of the mistake in connection with the bid on item 2, the arithmetical sum of the dollar amounts entered by Mr. Martin on the bid form for items 1, 2, and 3 was $683,000, rather than the $674,000 shown on the form as the bid total.)

Another bidder that responded to the IFB was Morris Plumbing Company, Inc. (“Morris”). Morris’ bid (as amended by a telegram prior to the bid opening) quoted $155,000 for item 1, $389,000 for item 2, $137,000 for item 3, and $690,000 for the total of the bid. (The arithmetical sum of the dollar amounts stated by Morris on its bid, as amended, for items 1, 2, and 3 was $681,000 and not the $690,000 quoted as the bid total.)

The bid opening took place on March 15, 1971, at the headquarters office of the Fort Worth District. At the bid opening, an official of the Fort Worth District opened each of the bids and read the amount listed as the total, and another official then recorded the same amount. The amount of $674,000 shown on the plaintiff’s bid as the total of that bid was the lowest of the totals listed on the several bids submitted in response to the IFB. After all the bids had been opened and read, it was announced orally that the plaintiff was the “apparent low bidder”; and the Fort Worth District then issued a written “memorandum of understanding” to the plaintiff, showing the plaintiff as the “apparent low bidder.”

Soon after the bid opening, personnel of the Forth Worth District began a review of the bids in order to determine whether there were any deficiencies in the bids, and also to determine, as to each bid, whether the sum of the amounts quoted for the three items comprising the bid was correctly reflected in the amount quoted by the bidder as the total of the bid. During the review of the bids, it was discovered that the three amounts that were entered on the plaintiff’s bid form for items 1, 2, and 3 totaled $683,000, rather than the $674,000 that had been entered on the form as the bid total. It was also discovered that the three amounts quoted on Morris’ bid, as amended, for items 1, 2, and 3 totaled $681,000, rather than the $690,000 indicated as the total of Morris’ amended bid.

After the discovery of the discrepancies mentioned in the preceding paragraph, personnel of the Fort Worth District purported to correct Morris’ bid and the plaintiff’s bid by indicating with a pen on the bids that Morris’ bid total was $681,000 and the plaintiff’s bid total was $683,000. Both the plaintiff and Morris were informed by the Fort Worth District that since the amounts of the three items comprising Morris' bid totaled $681,0(30, while the amounts of the three items comprising the plaintiff’s bid totaled $683,000, it was Morris, and not the plaintiff, that had submitted the low bid. A controversy over the matter ensued, with the plaintiff and Morris contending before the Corps of Engineers for the award of the contract, and with the plaintiff requesting permission to correct its bid so as to show $434,000 as the amount quoted for item 2.

During the course of the administrative proceedings, the plaintiff submitted to the Corps of Engineers both oral and written representations establishing that it had been the plaintiff’s intention to bid $434,000 on item 2 and to bid a total of $674,000 on all three items óf the IFB, and that the insertion on the bid form of $443,000, instead of $434,000, for item 2 was due to an‘ error on the part of the plaintiff’s employee, Luther J. Martin. Morris also submitted a letter stating that it had intended for the total of its bid to be $681,000 rather than $690,000.

The controversy over the award of the contract was ultimately decided administratively by the General Counsel of the Corps of Engineers, acting for the Chief of Engineers. The General Counsel concluded that the contract should be awarded to Morris, and not to the plaintiff.

Following the administrative determination mentioned in the preceding paragraph, the plaintiff was notified on May 6, 1971, by the Fort Worth District that permission to correct the plaintiff’s bid was denied, and that an award of the contract to Morris in the amount of $681,000 was being made that day.

After receiving the notification concerning the administrative decision, the plaintiff sent to the Comptroller General of the United States a telegram dated May 7, 1971, and a letter dated May 11, 1971, protesting the award of the contract to Morris. The Comptroller General’s decision on the plaintiff’s protest was dated December 21, 1971 (B-172900). The Comptroller General reviewed the evidence that had been presented to him, and then stated the following conclusions:

Upon review of the evidence before us we must conclude that McCarty’s bid price was $674,000, the figure inserted as the total price for the bidding schedule, and that award of the contract should have been made to McCarty, assuming that McCarty was otherwise acceptable as a prospective contractor.
However, since construction work has progressed to a considerable degree and recognizing that the contracting officer cannot be said to have acted unreasonably in the first instance, we do not believe that termination of the contract would be in the best interest of the Government.

The plaintiff thereafter instituted the present action on July 10,1972.

It appears that the amount ($137,139.-47) claimed by the plaintiff in the petition as damages is based principally upon the loss of anticipated profits which the plaintiff hoped to make on the contract that is involved in the present litigation. Although not articulated expressly in the petition, it has been one of the plaintiff’s legal contentions during the judicial proceedings that a contract came into existence between the defendant and the plaintiff as the low bidder, that the defendant breached the contract by wrongfully denying the plaintiff an opportunity to perform it, and that the plaintiff sustained damages, including the loss of anticipated profits, as a result of such breach.

The plaintiff’s claim for lost profits cannot be sustained. No contract between the defendant and the plaintiff ever came into existence. It is provided in 10 U.S.C. § 2305(c) that the award of a contract by an agency of the Army, Navy, Air Force, Coast Guard, or National Aeronautics and Space Administration “shall be made * * * by giving written notice to the responsible bidder whose bid conforms to the invitation and will be the most advantageous to the United States, price and other factors considered.” No written notice of award was ever made to the plaintiff with respect to the contract that is involved in the present case. It is true that, soon after the opening of the bids that had been submitted pursuant to the IFB, the Fort Worth District issued to the plaintiff a written “memorandum of understanding” showing the plaintiff as the “apparent low bidder.” However, the “memorandum of understanding” expressly stated that “the Government assumes no responsibility to award contract until after complete analysis has been made of the bid schedules.” Following such analysis and the administrative proceedings previously mentioned, the actual written award of the contract was made to Morris, and not to the plaintiff.

Accordingly, it would not be proper to permit the plaintiff to recover for the loss of anticipated profits in the present case, since the contract under which the plaintiff would have made such profits never actually came into existence. Keco Industries, Inc. v. United States, 428 F.2d 1233, 1240, 192 Ct.Cl. 773, 784 (1970) .

On the other hand, it is an implied condition of every invitation for bids issued by the Government that each bid submitted pursuant to the invitation will be fairly and honestly considered (Heyer Products Co. v. United States, 140 F.Supp. 409, 412, 135 Ct.Cl. 63, 69 (1956)); and if an unsuccessful bidder is able to prove that such obligation was breached and he was put to needless expense in preparing his bid, he is entitled to recover his bid preparation costs in a suit against the Government (Keco Industries, Inc. v. United States, supra, 428 F.2d at 1240, 192 Ct.Cl. at 785).

When personnel of the Fort Worth District purported to correct the bid totals on the bids submitted by Morris and the plaintiff, by showing $681,000 as Morris’ bid total and $683,000 as the plaintiff’s bid total, such personnel presumably was seeking to exercise the authority conferred by 32 CFR § 2.406-2 (1971) , which provided in part as follows :

Any clerical mistake apparent on the face of a bid may be corrected by the contracting officer prior to award, if the contracting officer has first obtained from the bidder written or telegraphic verification of the bid actually intended. Examples of such apparent mistakes are: obvious error in placing decimal point; obvious discount errors * * * ; obvious reversal of the price f. o. b. destination and the price f. o. b. factory; obvious error in the designation of units. * * *

Neither Morris’ bid nor the plaintiff’s bid, however, contained a “clerical mistake apparent on the face of a bid.” What was involved in each of the bids was a discrepancy between (1) the arithmetical sum of the amounts quoted on the three items comprising the bid and (2) the amount quoted as the total of the bid; and it was impossible to determine from the face of the bid whether the bidder had made a mistake in entering one or more of the three amounts for the separate items, on the one hand, or had made a mistake in entering the amount for the bid total, on the other hand. Thus, the present case did not come within the ambit of 32 CFR § 2.406-2; and the Fort Worth District acted without authority in purporting to correct the two bids on its own initiative.

Furthermore, the Fort Worth District did not, as required by 32 CFR § 2.406-2, “first * * * [obtain] from the bidder written or telegraphic verification of the bid actually intended.”

A proper bid correction in the present case could have been accomplished only upon the request of a bidder submitted in accordance with 32 CFR § 2.406-3(a)(3) (1971), which provided in part as follows:

(3) Where the bidder request permission to correct a mistake in his bid and clear and convincing evidence establishes both the existence of a mistake and the bid actually intended, a determination permitting the bidder to correct the mistake may be made; provided that, in the event such correction would result in displacing one or more lower bids, the determination shall not be made unless the existence of the mistake and the bid actually intended are ascertainable substantially from the invitation and the bid itself. * * * [Emphasis supplied.]

It is clear that Morris was not eligible to obtain a correction of its bid under the language quoted in the preceding paragraph, since such correction would have resulted in displacing the plaintiff’s lower bid, and “the existence of the mistake and the bid actually intended” were not “ascertainable substantially from the invitation and the bid itself.” As previously indicated in this opinion, Morris’ bid involved a discrepancy between the arithmetical sum of the amounts quoted on the three items comprising the bid and the amount quoted as the total of the bid; and it was impossible to determine from the face of the bid whether Morris had made a mistake in entering one or more of the three .amounts for the separate items or had made a mistake in entering the amount for the bid total.

On the other hand, the Corps of Engineers could properly have permitted the plaintiff to correct its bid under 32 CFR § 2.406-3(a) (3), as requested by the plaintiff, since such correction would not have involved any change in the bid total or the displacement of a lower bid.

In correcting Morris’ bid without authority, and thereby displacing the plaintiff’s lower bid, while refusing a proper request from the plaintiff that its low bid be corrected as to one item that did not affect the total, the Corps of Engineers acted in a discriminatory, arbitrary, and capricious manner, and failed to give the plaintiff’s bid the fair and honest treatment required by law. Cf. Armstrong & Armstrong, Inc. v. United States, 356 F.Supp. 514, 520 (E.D.Wash.1973).

The plaintiff is therefore entitled to reimbursement for its bid preparation costs, which totaled $4,200.

CONCLUSION OF LAW

Upon the findings of fact and the foregoing opinion, which are adopted by the court and made-a part of the judgment herein, the court concludes as a matter of law that the plaintiff is entitled to recover, and it is therefore adjudged and' ordered that the plaintiff recover of and from the United States the sum of four thousand two hundred dollars ($4,200).

       Whereas the court adopts the trial judge’s separate findings of fact, which are set forth in his report filed September 21, 1973, they are not printed herein since such facts as are necessary to the decision are contained in his opinion.