cites the fact that it consistently took this position--beginning with its revocation letter of 29 March 1966. But this letter was written after the dispute between the parties arose, is self-serving, and cannot bolster appellant's position except to show that its position after the dispute arose was consistent.* But to determine the parties' intent we must go back further, There is nothing shown of the original negotiations of the parties which would indicate that appellant construed the contract terms solely as a kind of framework for orders which it might accept or decline to fill at will. On the contrary, the record discloses expressions of appellant's intent which, while not perhaps wholly conclusive, tend to contradict its later stand. Appellant, in aid of its main arguments, has pressed certain other points which are equally unpersuasive. Clearly, in the light of the conclusion reached hereinafter, one cannot find in the terms of PART X of the contract schedule the kind of ambiguity to which the rule called "Contra Proferentem" can apply. The language of PART X is unambiguous and can acquire the meaning how attributed to it by appellant only as a matter of law - a view already rejected herein or by the proof of a specific intent of the parties as described by appellant. But contrary to appellant's argument, to apply the rule of interpretation against the drafter in the manner advanced here by appellant would be to frustrate what clearly appears to have been the intent of the parties. Yet, even if there were an ambiguity, the rule should not be mechanically applied to frustrate such intent. Shedd, Resolving Ambiguities in Interpretation of Government Contracts, 36 GEO. WASH. LAW REV. 1, 7-8, 21 (1967). Here quite clearly there is no place for the application of this rule. Appellant has further argued that the presence of a convenience termination clause relieves respondent of all effectively binding obligation to order even the minimum quantity. That argument has heretofore been raised against the binding nature of requirements contracts and has been rejected conclusively both by this Board and the Court of Claims. Gulf Coast Aviation Co., Inc., ASBCA Nos. 10189 and 10380, 65-2 BCA par. 4928; Shader Contractors, Inc., ASBCA Nos. 3957 and 4276, 58-1 BCA par. 1579; Aetna Plywood & Veneer Co., ASBCA No. 2526 (1955); Shader Contractors, Inc. v. United States, supra. The argument can be no more effective here. Finally, appellant has argued that each order by respondent is a separate contractual entity and that so considered, the minimum quantity order cannot be consideration for appellant's promise to supply generators in excess of the minimum quantity when ordered by the Government thereafter. There is no doubt that separate delivery orders, such as *As to the potential effect of inconsistent post litem motam positions on a contractor's claim see willard, Sutherland & Co. v. United States and Atwater & Co. v. United States, both supra. Under these decisions appellant is bound to the contract prices for the minimum quantity order D. O. No. 33747 and the first additional order D.O. No. 34018. respondent used here, can for some purposes be considered as separate contracts. The decisions cited by appellant are not, however, as clearly applicable as might seem. For here, the several orders which might be given are tied together among themselves and with the minimum order for each class of generator sets by a sliding scale of unit prices operating cumulatively. Thus, each order can only be priced by reference to prior orders in each class. To that extent the contract on its face does not reflect the concept of separability of orders on which appellant relies. Moreover, 10 treat each D.0. given by respondent to appellant as a separate contract requiring its own consideration has been found by the Board to be contrary to the intent of the parties at the time when the contract was entered into. Just as the rule of "Contra Proferentem" will not be so applied, so appellant's separability interpretation will not be applied to thwart the intent of the parties. Appellant was, therefore, bound to furnish to the Government generator sets, when ordered, up to the maximum quantity and, in the absence of a suitable price revision clause, at the prices stated in the contract. IV Appellant has argued that, even if the Board were to determine that appellant had entered into a binding contract for the delivery of up to 3600 generator sets, when ordered, the contract could not be used to reprocure 763 generator sets under D.O.'s Nos. 35775 and 41205, when respondent knew that this order would inflict a substantial loss upon appellant. The contract, construed by the Board as binding upon appellant up to the maximum quantity for each class of generators, did not contain any limitation in its terms as to the causes or motives which might lead respondent to order generator sets from appellant within the maximum prescribed. As the events showed, the maximum was a generous figure, for respondent ordered only 2,633 generator sets out of a possible grand total of 3,600. There was nothing in the contract, in particular, which restricted respondent to order only quantities which had not yet been ordered from other contractors. On the contrary, one would assume that the contract, with its flexibility as to the number of generator sets to be delivered thereunder, provided a suitable and ready means for reordering those quantities of generator sets which other contractors had failed to deliver. This Board has held that a contractor is not discharged from its obligation to furnish supplies in response to orders of the Government which were issued after the contractor had decided to discontinue the manufacture thereof as unprofitable and after the Government had become aware of this fact. Standard Steel & Tube Corporation, ASBCA 12076, 67-1 BCA par. 6199; Lucas Aircraft Supply Co., ASBCA No. 11167, 66-1 BCA par. 5671. The same rule applies where the contractor continues in the business of manufacturing the supplies contracted for, as appellant here did. Hence, there was nothing in the direct contractual relationship of the parties which required respondent to forego its contractual right to order generator sets at the contract price, although at a loss to appellant. According to appellant, the situation here is different because the Government is reprocuring supplies on the delivery of which the original contractor is said to have inexcusably defaulted, and for the excess costs of which in the event of reprocurement he is said to be liable. Octagon Process, Inc., ASBCA No. 10371, 65-2 BCA par. 5168, is cited by appellant in support of the proposition that on reprocurement the Government may pass up the lowest price bid by a prospective reprocurement contractor, if such price is known to inflict a loss upon him, and reprocure at a higher price, charging the defaulted contractor with the difference. But that is not the proposition for which Octagon stands. All that this decision held was that, where the Government before award became aware of a low bidder's mistake and hence was not entitled to hold him to his bid (see Framlau Corp., IBCA No. 228, 61-2 BCA par. 3116), it fulfills its duty toward the defaulted contractor to mitigate damages by awarding the reprocurement to the next lowest bidder (who has thus become the lowest acceptable bidder). Nor is the appellant served by the statement that reprocurement is not for the Government's account. The regulations which govern the contracting officer's conduct in letting reprocurement contracts require him to reprocure not, as appellant asserts (Br. p. 48), at a "reasonable" price but "at as reasonable a price as practicable" (ASPR 8-602.6(a)), that is, at the lowest practicable price. If he fails to do so, for instance by not securing savings reasonably available, the amount of excess costs resulting from his failure is "unnecessary" and, hence, uncollectible. National Robe Company, ASBCA Nos. 11227, 11333, 67-1 BCA par. 6365. Nor is there anything in the laws of the United States, applicable regulations, or the decisions of courts or contract appeals boards which requires a contracting officer to incur greater excess costs and thereby to create potential litigation and collection problems for the Government, when he can by permissible contractual action avoid or minimize the dangers presented by litigation as to the excusability or existence of a default, or the collectibility of the excess costs. Since respondent was entitled to procure the 763 Bogue units by ordering the same from appellant, the contracting officer was under no obligation to enter into an additional contract for their reprocurement unless he could do so at prices lower than appellant's. It was perhaps this hope, tenuous as it might have been, which inducted SAMA to issue RFP's for the reprocurement of the Bogue units. If so, such hopes were disappointed. In the ensuing negotiations SAMA adopted the idea of ordering the Bogue units under Contract No. AF 04 (606)-15369. A memorandum making certain concessions to appellant (ASBCA No. 11918, R4 doc. V) was drafted by the SAMA negotiators but was not accepted by appellant. Further price negotiations in March 1966 led to a tentative agreement on terms and prices, substantially higher than those listed in appellant's then-existing contract. This tentative agreement was, however, by its terms previously quoted, conditional upon availability of funds and approval by higher authority. Either or both must have been lacking for the agreement was not consummated, and in April 1966 the first of the disputed D.0.'s was issued to reprocure units which Bogue had failed to deliver. In the light of this record it cannot be said that SAMA's issuance of a RFP for the reprocurement of the Bogue units under a separate contract committed respondent to this course and, therefore, barred it from obtaining these units by D.O.'s issued under appellant's existing contract. Consequently the issuance of D.O. Nos. 35775 and 41205 must be upheld as valid against the attack that they could not be used to procure or reprocure the units on which Bogue had defaulted. V Accordingly, the three appeals challenging the validity of the several delivery orders issued by respondent under Contract No. AF 04(606)-15369 must be, and they hereby are, in all respects denied. UNITED STATES v. PURCELL ENVELOPE COMPANY 249 U.S. 313 (1919) Reprinted supra at p. 4 |