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Title 15, Chap. 7.

Regulations of supplies.

Title 40.

Advances of

SEC. 1549. It shall be the duty of the President to make, subject to the provisions of law concerning supplies, such regulations for the purchase, preservation, and disposition of all articles, stores, and supplies for persons in the Navy, as may be necessary for the safe and economical administration of that branch of the public service.

26 Aug., 1842, s. 2, v. 5, p. 535. 3 March, 1847, s. 1, v. 9, p. 171. NOTES.-Authority given by Congress to make a contract implies none to change it after it is made.-Op. IX, 80 and 104. [See post, Supreme Court Decisions.]

Where a contract is made, after advertisement, with the lowest bidder, the head of a Department has no authority to modify its terms inregard to time of delivery, or any other of its material elements.-Op. IV, Sept. 24, 1844, p. 334. Cannot be renewed and extended at the pleasure of a head of a Department. No extension, unless for a period fixed as an alternative in the proposals, is authorized or sanctioned by law.-Op. XIII, 175, Dec. 4, 1869.

An act directing the Secretary of the Navy to enter into a contract is not a contract per se. The Secretary makes the contract and may vary the details.Wallace, VIII, p. 358; C. C. I, 28.

Where the Secretary of the Navy may enter into a contract for the construction of a vessel, he may suspend the work contracted for and agree with the contractors as to the compensation to be paid for the partial completion of the same.-C. C., vol. II, p. 126; Otto, V, 91, p. 321.

When a contract is closed the general rule is that it must be executed without change of terms, which are not subject, in general, to change at the will of either party or of both parties.-Op. X, 480. Later authorities appear to favor the exercise, by the head of a Department, of a discretion to consent to modifi cations of detail, in the course of the execution of public contracts, when such modifications (not being in contravention of law) are found to be for the public interest, and are not of such a character as to operate to the pecuniary disad vantage of the United States.-Winthrop's Digest cites Otto 91, p. 321, and Op. XV, 481.

Where Congress authorized the examination of a claim and appropriated a sum not exceeding a fixed amount to pay it, and a less sum was found due, held that the appropriation was exhausted when latter amount was paid.—Op. IX, 451. See Op. IX, 449, as to principles governing payment of money to a citizen under a special act of Congress.

In breach of contract the law contemplates two elements of damage: 1, losses sustained; 2, gains prevented.-C. C. VII, 543. Affirmed by S. C.

A military board of survey is an ex parte tribunal; decision not binding on a contractor, its proceedings not evidence against him, &c.-C. C. VIII, p. 213. The award by a commission on a contract, can be refused to be received, or the contractor can accompany his receipt of it with a proper protest.-Idem. See also C. C.II, 95.

The sureties of a contractor are not responsible for fulfillment, after his death, on what are called personal contracts, where skill or taste is required.-Op. VI, p. 410.

A claim for damages was adjusted by the appropriate Department on a basis to which the contractor agreed. His acceptance and receipt, in full, for the sum allowed is a bar to his suit for a further sum.-S. C. Otto, 104, 464. See also Wallace, XIV, 535.

Rescinding or renouncing contracts. See C. C. I, 61, 336; III, 38; V, 496; VII, 331; VIII, 67, 319. Op. X, 416. Government delaying or preventing perform ance by contractor. See C. C., IV, 258. 271; IX, p. 244. Op. XI, 263. Government requesting alterations. C. C., IX, 50; Wallace, XVII, p. 592. Willing. ness and efforts to perform. C. C., VII, 93, V, 490; Wallace, VIII, 77. Fraudu lent contracts. Wallace, VII, 463. Set offs. Op. IV, 380, XI, 120. C. C. XVII, 39, 236, 322. Fines and penalties. Op. IX. 32. Erasures and substitution of items. C. C. II, 366; Wallace, VIII, 489. Op. XV, 226. C. C. V, 215.

SEC. 3648. No advance of public money shall be made in any case whatever. And in all cases of contracts for the performance of any public money on service, or the delivery of articles of any description, for the use of the United States, payment shall not exceed the value of the service rendered, or of the articles delivered previously to such payment.


Title 43.

31 Jan., 1823, s. 1, v. 3, p. 723.

SEC. 3709. All purchases and contracts for supplies or services, in any of the Departments of the Government, except for personal services, Advertisements shall be made by advertising a sufficient time previously for proposals for proposals. respecting the same, when the public exigencies do not require the immediate delivery of the articles, or performance of the service. When immediate delivery or performance is required by the public exigency, the articles or service required may be procured by open purchase or contract, at the places and in the manner in which such articles are usually bought and sold, or such services engaged, between individuals. [See § 3718.]

2 March, 1861, s. 10, v. 12, p. 220. 22 June, 1874, v. 18, p. 177. NOTE. This section invests the officer charged with the duty of contracting for supplies, or services, with discretion to dispense with advertising if the exigencies of the service require immediate delivery or performance.-C. C. VII, 93; S. C. Wallace, VIII, 77. See, also, Op: III, 437; C. C. I, 48; VII, 84; II, 96; IX. 291.

A navy paymaster purchasing under instructions from commanding officer, entitled to credit for sum expended, although purchased without advertising.C. C. XV, 247.

SEC. 3710. Whenever proposals for supplies have been solicited, the Opening bids. parties responding to such solicitation shall be duly notified of the time and place of opening the bids, and be permitted to be present either in person or by attorney, and a record of each bid shall then and there be made.

31 Jan., 1868, 8, Res., v. 16, p. 246.


Contracts for the military or

SEC. 3714. All purchases and contracts for supplies or services for the military and naval service shall be made by or under the direction of naval service, the chief officers of the Departments of War and of the Navy, respect- how controlled. ively. And all agents or contractors for supplies or service as aforesaid shall render their accounts for settlement to the accountant of the proper Department for which such supplies or services are required, subject, nevertheless, to the inspection and revision of the officers of the Treasury in the manner before prescribed.

16 July, 1798, s. 3, v. 1, p. 610. 27 Feb., 1877, v. 19, p. 249.

SEC. 3718. All provisions, clothing, hemp, and other materials of Naval supplies every name and nature, for the use of the Navy [excepting ordnance, gun- to be furnished powder, or medicines, or the supplies which it may be necessary to purchase by contract. out of the United States for vessels on foreign stations; bunting, cheese, things contraband of war, preserved meats, pickles, butter, and desiccated vegetables, flour, fuel, and materials for boilers. Sections 3721, 3726, 3727, 3728, 3729, and acts of June 14, 1878, and March 3, 1881], and the transportation thereof, when time will permit, shall be furnished by contract, by the lowest bidder, as follows: In the case of provisions, clothing, hemp, and other materials, the Secretary of the Navy shall advertise, once a week, for at least four weeks, in one or more of the principal papers published in the place where such articles are to be furnished, for sealed proposals for furnishing the same, or the whole of any particular class thereof, specifying the classes of materials and referring bidders to the several chiefs of Bureaus, who will furnish them with printed sched-. ules, giving a full description of each and every article, with dates of delivery, and so forth. In the case of transportation of such articles, he shall advertise for a period of not less than five days. All such proposals shall be kept sealed until the day specified in such advertisement for opening the same, when they shall be opened by or under the direction of the officer making such advertisement, in the presence of at least two persons. The person offering to furnish any class of such articles, and giving satisfactory security for the performance thereof, under a forfeiture not exceeding twice the contract price in case of failure, shall receive a contract for furnishing the same. [See § 3709.]

3 March, 1843, v. 5, p. 617.

28 Sept., 1850, s. 1, v. 9, p. 513.
17 Apr., 1866, s. 4, v. 14, p. 38.

5 Aug., 1854, s. 1, v. 10, p. 585. NOTES.-The acceptance of the proposition of a bidder creates a contract of the same force and effect as if a formal contract had been written out and igned by the parties.-Otto, 93, 242. C. C., XVII, 92. See Op. XV, 648, as to time in which bids may be withdrawn.

When a party furnishes sureties and binds himself for the performance of his bid, if accepted, the contract becomes mutual and binding from the moment of its acceptance, although a formal written contract is to be subsequently executed.-C. C., vol. I, 192.

A formal notice to a bidder of the acceptance of his bid and of the award of the contract to him, is beyond recall, and binding on the United States as a completed obligation. An award thus made is in the nature of a preliminary contract.-Op. XV, 226.

Head of Department has power in advertising for proposals to reserve "the right to reject any and all bids if, in his judgment, the interests of the Govern nent require it." Right of lowest bidder perfect against others, but does not exclude the counter right of the head of the Department of considering, in the Interest of the Government, the whole subject, and deciding whether it be fit that any bid should be accepted.-Op. XIV, 682.

The sta utory advertisement for proposals does not enlarge, control, or change the express terms of the contract, and is to be considered as merged therein.-C. C., V, p. 416.

The advertisement and the proposals in response thereto do not form a part of the subsequent contract, and cannot be admitted to contradict or vary the terms thereof. - C. C. VIII, 501.

Under a contract for a certain quantity of an article, or more if required, a Department is not precluded from advertising for new proposals and awarding a contract for a superior article. Not obliged to receive more than the specified quantity.-Op. XVI, 183. See also Op. X, 93.

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Record of bid and report Congress.

SEC. 3719. Every proposal for naval supplies invited by the Secretary of the Navy, under the preceding section, shall be accompanied by a written guarantee, signed by one or more responsible persons, to the effect that he or they undertake that the bidder, if his bid is accepted, will, at such time as may be prescribed by the Secretary of the Navy, give bond, with good and sufficient sureties, to furnish the supplies proposed; and no proposal shall be considered, unless accompanied by such guarantee. If, after the acceptance of a proposal, and a notification thereof to the bidder, he fails to give such bond within the time prescribed by the Secretary of the Navy, the Secretary shall proceed to contract with some other person for furnishing the supplies; and shall forthwith cause the difference between the amount contained in the proposal so guaranteed and the amount for which he may have contracted for furnishing the supplies, for the whole period of the proposal, to be charged up against the bidder and his guarantor; and the same may be immediately recovered by the United States, for the use of the Navy Department, in an action of debt against either or all of such persons.

10 Aug., 1846, s. 6, v. 9, p. 101.

SEC. 3720. All such proposals for naval supplies shall be preserved to and recorded, and reported by the Secretary of the Navy to Congress at the commencement of every regular session. The report shall contain a schedule embracing the offers by classes, indicating such as have been accepted. In case of a failure to supply the articles or to perform the work by the person entering into such contract, he and his sureties shall be liable for the forfeiture specified in such contract, as liquidated damages, to be sued for in the name of the United States.

Purchases that may be made

3 March, 1843, v. 5, p. 617.

SEC. 3721. The provisions which require that supplies shall be purwithout adver chased by the Secretary of the Navy from the lowest bidder, after adtising. vertisement, shall not apply to ordnance, gunpowder, or medicines, or the supplies which it may be necessary to purchase out of the United States for vessels on foreign stations, or bunting delivered for the use of the Navy, or tabacco,* or butter or cheese destined for the use of the Navy, or things contraband of war. Contracts for butter and cheese for the use of the Navy may be made for periods longer than one year, if, in the opinion of the Secretary of the Navy, economy and the quality of the ration will be promoted thereby. The Secretary of the Navy may enter into contracts for tobacco,* from time to time, as the service requires, for a period not exceeding four years; and in making such contracts he shall not be restricted to the lowest bidder, unless, in his opinion, economy and the best interests of the service will be thereby promoted. [See § 3718.]

What bids may be rejected.

3 March, 1845, s. 3, v. 5, p. 791. 3 March, 1847, s. 2, v. 9, p. 172. 3 Aug., 1848, s. 11, v. 9, p. 272. 2 March, 1865, s. 7, v. 13, p. 467 SEC. 3722. The chief of any Bureau of the Navy Department, in contracting for naval supplies, shall be at liberty to reject the offer of any person who, as principal or surety, has been a defaulter in any previous contract with the Navy Department. Parties who have made default as principals or sureties in any former contract shall not be received as sureties on other contracts; nor shall the copartners of any firm be received as sureties for such firm or for each other; nor, in contracts with the same Bureau, shall one contractor be received as surety for another. Every contract shall require the delivery of a specified quantity, and no bids having nominal or fictitious prices shall be considered. If more than one bid be offered by any one party, by or in the name of his or their clerk, partner, or other person, all such bids may be rejected; and no person shall be received as a contractor who is not a manufacturer of, Opening bids or regular dealer in, the articles which he offers to supply. All persons. offering bids shall have the right to be present when the bids are opened and inspect the same.


for the Navy.


3 March, 1863, s. 2, v. 12, p. 828.

SEC. 3723. No chief of a Bureau shall make any contract for supplies foreign supplies for the Navy, to be executed in a foreign country, except it be on first advertising for at least thirty days in two daily newspapers of the city of New York, inviting sealed bids for furnishing the supplies desired;

* Tobacco to be procured after advertisement. See act of March 3, 1881, post.

which bids shall be opened in the presence of the Secretary of the Navy and the heads of two Bureaus; and contracts shall in all cases be awarded to the lowest bidder; and paymasters for the Navy on foreign stations shall render, when practicable, with their accounts, an official certificate from the resident consul, or commercial or consular agent of the United States, if there be one, to be furuished gratuitously, vouching that all purchases and expenditures made by the paymasters were made at the ruling market-prices of the place at the time of purchase or expenditure.

3 March, 1871, s. 3, v. 16, p. 535.

SEC. 3724. Where articles are advertised and bid for in classes, and Rejection of exin the judgment of the Secretary of the Navy any one or more articles cessive bids. appear to be bid for at excessive or unreasonable prices, exceeding ten

per centum above their fair market-value, he shall be authorized to re

ject such bid.

4 July, 1864, s. 7, v. 13, p. 394.

SEC. 3725. All hemp, or preparations of hemp, used for naval pur- Hemp. poses by the Government of the United States, shall be of American growth or manufacture, when the same can be obtained of as good quality and at as low a price as foreign hemp.

14 July, 1862, s. 11, v. 12, p. 554.


SEC. 3726. The Secretary of the Navy is authorized to procure the preserved meats, pickles, butter, and desiccated vegetables, in such man- meats, &c. ner and under such restrictions and guarantees as in his opinion will best insure the good quality of said articles.

18 July, 1861, s. 7. v. 12, p. 265.



SEC. 3727. The Secretary of the Navy is authorized to purchase, in such manner as he shall deem most advantageous to the Government, bread. the flour required for naval use; and to have the bread for the Navy baked from this flour by special contract under naval inspection.

3 March, 1863, s. 4, v. 12, p. 818.

Home manu

SEC. 3728. The Secretary of the Navy, in making contracts and purchases of articles for naval purposes, shall give the preference, all other factures tobe prethings, including price and quality, being equal, to articles of the growth, ferred. production, and manufacture of the United States. In purchasing fuel

for the Navy, or for naval stations and yards, the Secretary of the Navy Fuel.
shall have power to discriminate and purchase, in such manner as he
may deem proper, that kind of fuel which is best adapted to the pur-
pose for which it is to be used.

28 Sept., 1850, s. 1, v. 9, pp. 513, 515.

SEC. 3729. The Secretary of War, the Secretary of the Navy, and the Bunting. Secretary of the Treasury may enter into contract, in open market, for bunting of American manufacture, as their respective services require, for a period not exceeding one year, and at a price not exceeding that at which an article of equal quality can be imported.

2 March, 1865, s. 7, v. 13, p. 467.

reservations on deliveries.

SEC. 3730. The Secretary of the Navy may relinquish and pay all res- Relinquishment ervations of the ten per centum upon deliveries made under contracts of with the Navy Department, where these reservations have arisen and the contracts have been afterward extended, or where the contracts have been completed after the time of delivery, by and with the consent of the Department, or where the contracts have been dissolved by the like consent, or have been terminated, or an extension thereof has been prevented by operation of law, where no injury has been sustained by the public service.

17 June, 1844, s. 5, v. 5, p. 703.

NOTES.-Where a contractor failed to complete, and other parties did it on much
less terms, held that the United States having sustained no loss, the original con-
tractor was entitled to the 10 per cent. reservation, but not to the profits he
would have made, nor to the difference between the contract price and that
which others were paid. Some special provisions were in this contract.]--
Otto, 99, p. 30.

In a failure to fulfill, neither the head of the Department nor the accounting
officers can pay the reservations. They have no authority to adjust claims for
damages under contracts. Congress alone can afford relief.—Op. II, 481: IV,
327; VI, 516. Claim for unliquidated damages, breach of contract, cannot be
entertained by the accounting officers.-Op. XIV, p. 24.

Name of con

Contract fully performed and no damage whatever sustained by Government, per diem forfeiture not warranted.-9p. XV, p. 420.

The head of a Department may waive a forfeiture in a case of good faith where the forfeiture occurred through misfortune. The officers of the Government are not bound, from the nature of our institutions, to perpetuate an act of injustice in the name of the United States. Op. II, p. 485."-Op. XII, p. 112. SEC. 3731. Every person who shall furnish supplies of any kind to the tractor to appear Army or Navy shall be required to mark and distinguish the same with the name of the contractor furnishing such supplies, in such manner as the Secretary of War and the Secretary of the Navy may, respectively, direct; and no supplies of any kind shall be received, unless so marked and distinguished.

on supplies.


17 July, 1862, s. 15, v. 12, p. 596.

SEC. 3732. No contract or purchase on behalf of the United States contracts prohib- shall be made, unless the same is authorized by law or is under an ited. appropriation adequate to its fulfillment, except in the War and Navy Departments, for clothing, subsistence, forage, fuel, quarters, or transportation, which, however, shall not exceed the necessities of the current year.

"No contract to


2 March, 1861, s. 10, v. 12, p. 220.

NOTE.-Contracts for clothing, subsistence, forage, fuel, quarters, and transportation may be made, though there is no appropriation adequate to the ful fillment of the contract or purchase, not to exceed the necessities of the current year.-Op. XV, 124 and 209. See also Op. VI, 27.

SEC. 3733. No contract shall be entered into for the erection, repair, or exceed appropri- furnishing of any public building, or for any public improvement which shall bind the government to pay a larger sum of money than the amount in the Treasury appropriated for the specific purpose. [See § 5503.]

Restrictions on

25 July, 1868, s. 3, v. 15, p. 177.

SEC. 3734. Before any new buildings for the use of the United States commencement are commenced, the plans and full estimates therefor shall be prepared of new buildings. and approved by the Secretary of the Treasury, the Postmaster-General, and the Secretary of the Interior; and the cost of each building shall not exceed the amount of such estimate. [See § 3663, APPROPRIATIONS, Part III.]

Contracts lim

15 July, 1870, v. 16, p. 296.

SEC. 3735. It shall not be lawful for any of the Executive Departments ited to one year. to make contracts for stationery or other supplies for a longer term than one year from the time the contract is made.

Restriction on

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NOTE. The head of a department is the competent judge of the matters of fact involved in the aceptance or rejection of any of the proposals for stationary.-Op. VI, p. 226.

SEC. 3736. No land shall be purchased on account of the United States, purchases of except under a law authorizing such purchase. (See PUBLIC PROPERTY and BUILDINGS, Part III.)


No transfer of contracts.

1 May, 1820, s. 7, v. 3, p. 568.

SEC. 3737. No contract or order, or any interest therein, shall be transferred by the party to whom such contract or order is given to any other party, and any such transfer shall cause the annulment of the contract or order transferred, so far as the United States are concerned. All rights of action, however, for any breach of such contract by the contracting parties, are reserved to the United States.

17 July, 1862, s. 14, v. 12, p. 596.

NOTES. This section (3737) is intended simply for the benefit of the United States, which is not compelled to avail itself of a transfer by the contractor, but may recognize the same and accept and pay the assignee.-Ops. XVI, p. 278; XV, p. 236.

Contracts of a personal nature, importing high trust and confidence in contractors, cannot be assigned or transferred without the consent of the Depart ment.-Op. X, p. 5.

An assignment of contract, under act of July 17, 1862, is void, and passes no title, legal or equitable. An assignment of a claim for money due under a contract passes title to the money due, as though it were the sale of a chattel.-C. C., IX, p. 156. See also C. C., V, 504.

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