Full opinion text
REED, Justice (sitting by designation). The plaintiff, New York Mail and Newspaper Transportation Company, brought this suit in this Court on April 15, 1954, against the United States to recover damages for an alleged breach by the Government of a contract between the United States and plaintiff. Various items, some variable, enter into the total damages claimed aggregating around two million dollars. That contract was for the rental by the Government of pneumatic tubes on Route 507011-A, New York, New York, for the transmission of the mails from January 1, 1951, through December 31, 1960. On December 29, 1953, defendant, having closed down this Pneumatic Tube Service during that December with notice thereof to plaintiff, advised plaintiff that it considered the contract “null and void.” The notice added, “The purported contract if valid is hereby cancelled in the public interest.” Plaintiff, on January 23, 1954, notified defendant that the contract was terminated for breach by the Government. The plaintiff had allowed until January 22, 1954, for defendant to consider plaintiff’s position that the defendant had no legal right to terminate the contract. In the letter plaintiff explained that on termination of the contract, its employees would be scattered and its property values impaired. Defendant has not used the property since December 1953. The contract dated December 29, 1950, continued arrangements between the United States and the owners of the pneumatic tube service that had existed, with some intermissions since about 1897. The provisions of law underlying the various contracts and their terms varied substantially. The contract before the one here in question ran from January 1 to December 31, 1950. Like those immediately preceding it, this contract was on a lease or rental basis with the Government operating the tube system and the lessor bearing the cost of repair and maintenance. In preparation for handling New York mail after 1950, the Post Office Department on April 24, 1950, advertised for proposals for furnishing a pneumatic tube system generally on the' same rental basis as the existing contract. The pertinent provisions of the governing statutes at that time required for pneumatic tube contracts a preliminary investigation and a favorable report on the practicalities of such service. “Advertisements shall state in general terms only the requirements of the service” calculated to invite competitive bidding. They were to run for six weeks in not less than five newspapers. The contracts were to be subject to the postal laws and regulations relating to the letting of mail contracts. 39 U.S.C. (1946 ed.) § 423, 39 U.S.C.A. § 423. See finding 4. Furthermore, 39 U.S.C. § 429, 39 U.S. C.A. § 429, directed: “All contracts for carrying the mail shall be in the name of the United States and shall be awarded to the lowest responsible bidder tendering sufficient guaranties for faithful performance in accordance with the terms of the advertisement.” There is no contention that these requirements were not followed in the April 1950 advertisement for bids. However, plaintiff in its proposals to the United States in answer to the advertisement did not make its offer to contract in accordance with the terms of the advertisement. Instead, it submitted a proposal which specifically stated, “Conditions and requirements in your advertisement not specifically included in our proposal are intended to be excluded from our proposal.” Finding 13. Without detailing in extenso the variations between the invitation to bid and plaintiff’s proposal and eventual contract, which appear in findings 12 to 23, inclusive, the conclusion is necessary that the variations were material. There was omitted the advertised requirement that the contract was to be subject to cancellation for failure of plaintiff to change the location of the system by reason of changes by the Government in the tube terminals, findings 12 and 14; that the Postmaster General might terminate the contract when the public interest might require, finding 12; and that the contractor should bear the expense of converting the system from DC to AC electricity, at a cost estimated between $125,000 and $350,000. Contract, variable costs, ¶ 2, Schedule A of contract, and finding 12. The cost turned out to be $214,870.13. Finding 32. Plaintiff’s proposal and contract required the assumption of this cost with interest by the Government through amortization. Instead' of a rate per annum for rent, as called for by the advertisement for bids, the contract makes the rental vary from year to year, depending upon operating and general expenses, e. g., operating taxes, wages, amortization of electrical conversion cost. There was a limit to bring total compensation within the statutory authority of the Department on cost. This method of payment appears to assure plaintiff a guaranteed net rental for the system, limited by the overall power of the Department to contract for pneumatic tube service. See Act of 1950, 64 Stat. 1118. The Government’s defense, in accordance with its notice, is two-fold — (1) that the contract is void because of its material departure from the terms of the advertised invitation to bid, and (2) that the cancellation “in the public interest” of the contract on December 29, 1953, by the Postmaster General was a valid exercise of a retained power under § 97.67(b) of the Postal Laws and Regulations, Edition of 1948. As the second defense depends on a regulation that by its terms not only authorizes termination of a contract but settles all problems of damages, it should be considered first. 1. The section, at all times during the advertisement, negotiation and termination of this contract, read as follows: “(b) The Postmaster General may discontinue or curtail the service on any mail route, in whole or in part, in order to place on the route superior service, or whenever the public interests, in his judgment, shall require such discontinuance or curtailment for any other cause. The contractor shall be allowed, as full indemnity, one month’s extra pay, on the amount of service dispensed with and a pro rata compensation for the amount of service retained and continued. ” The Government contends the section was made applicable to Service by Pneumatic Tubes by § 95.2. “The general provisions relating to contract service, Part 97 of this chapter, shall apply, so far as pertinent, to the pneumatic-tube service.” As reports to the Postmaster General before his discontinuance of the route showed by unchallenged evidence that an annual savings in postal operations of over $700,000 would be made by substituting trucks for the tube system, there was a substantial factual basis for the cancellation, if there was power in the Postmaster General to cancel. Power is the nub of this issue. The regulation, if applicable to this contract, could not, of course, validly be waived by the Postmaster General in this particular instance. Actually the contract right to cancel in the public interest called for by the advertisement was omitted from the contract. We do not speculate on the reason, for the contract was finally made pursuant to the authority of the Act of 1950. The section here applicable reads: “Sec. 2. Contracts for the transmission of mail by pneumatic tubes or other mechanical devices shall be subject to the provisions of laws relating to the letting of mail contracts, except as otherwise provided •in this Act. Advertisements shall state in general terms only the requirements of the service and shall be in the form best calculated to invite competitive bidding. The Postmaster General may reject any and all bids. No contract shall be awarded except to the lowest responsible bidder tendering full and sufficient guaranties to the satisfaction of the Postmaster General of his ability to perform satisfactory service.” 64 Stat. 1118. Section 97.67(b) does not appertain to a “letting of mail contracts” but to their “discontinuance.” Although the phrase “letting of mail contracts” has appeared in the statutes relating to pneumatic tube operation since 1902 (32 Stat. 114), we do not think that the regulation, § 97.67(b), should be read as authorizing the cancellation attempted in the notice of December 29, 1953. It is a harsh regulation when applied to a long term contract, requiring such a heavy investment by the other contracting party, largely useless for other activities. We recognize that the power retained by the Postmaster General to cancel a star route contract has been enforced by the Supreme Court in Garfielde v. United States, 3 Otto. 242, 93 U.S. 242, 23 L.Ed. 779. There the contractor’s proposals followed the advertisement and “instructions attached,” which contained a regulation authorizing discontinuance in the public interest. See also Slavens v. United States, 196 U.S. 229, 232, 25 S.Ct. 229, 49 L.Ed. 457, upholding the power to cancel a mail contract containing a clause providing for such a discontinuance as was attempted in the present case. The contract now under consideration did not contain such a clause. We would need more specific words than the uncertainty of § 95.2, supra, that the “general provisions, relating to contract service, Part 97 * * * shall apply, so far as pertinent,” to the tubes, to hold that § 97.67(b) controlled this contract. The cancellation related to “public interests,” not “contract service.” It does not govern this situation. Nor would it govern if no contract had been validly adopted. 2. We now consider the first defense —the nullity of the contract because of the material departure of the contract from the advertised invitation. We think that the variations, previously listed herein, between the invitation, plaintiff’s proposals, and the contract actually signed, demonstrate that the April advertisement could not be treated as a compliance with the essential provisions of 39 U.S.C. (1946 ed.) §§ 423 and 429, 39 U.S.C.A. §§ 423, 429, set out on p. 2, supra. Those sections remained the governing law as to advertising of postal requirements. Neither the Act of 1948, 62 Stat. 1163, nor of 1950, 64 Stat. 1118, made any change. After the 1950 Act the statutory requirements for advertisements were the same as before its passage. The 1950 Act, § 2, as theretofore, made the newly authorized contract “subject to the provisions of laws relating to the letting of mail contracts.” The authority of an officer to enter into a contract binding the United States must be found in some legally enacted provision of law. That rule has been long recognized. In re Floyd Acceptances, 7 Wall. 666, 19 L.Ed. 169; see Hooe v. United States, 218 U.S. 322, 334, 31 S.Ct. 85, 54 L.Ed. 1055; Eastern Extension Australasia & China Tel. Co. v. United States, 251 U.S. 355, 363, 40 S.Ct. 168, 64 L.Ed. 305; United States v. Goltra, 312 U.S. 203, 208, 61 S.Ct. 487, 85 L.Ed. 776; Fries v. United States, 6 Cir., 170 F.2d 726, 730. When the statutes on contracts for the carriage of the mails call for prior advertisement, the execution of a contract without such advertisement is invalid. Cf. United States v. Ellicott, 223 U.S. 524, 543, 32 S.Ct. 334, 56 L.Ed. 535. If this contract had been drawn in accordance with the April 1950 advertised requirements for proposals, it may be that a second advertisement under the December 1950 Act would be unnecessary even though it called for compliance with the laws relating to letting mail contracts obviously including those imposing advertisement. 64 Stat. 1118. It was unlikely that any other bidder would compete, as there was no other tube system. A second advertisement was thought by the Attorney General to be unnecessary in a case where former bids, after advertisement, met the requirements of the advertisement. Here there was no attempt to meet the terms of the advertisement. The contractor secured material modifications by negotiation. The Postmaster General did not rely on a rule of necessity to maintain postal functions. Cf. 41 U.S.C. § 5, 41 U.S.C.A. § 5. There is no indication of exigency. Trucks were used in 1953. United States v. Speed, 8 Wall. 77, 83, 19 L.Ed. 449. Nothing appears to indicate the use of the system could not have been extended for the time necessary to advertise. The history of the 1950 Act does not show any direction by or intention of Congress to have this contract executed by the Postmaster General, without complying with previous provisions for advertisement. In fact his request for legislation and the Act really changed nothing except the limit on rent per mile. It need hardly be said that the general requirements of advertising for government contracts is a true rule of necessity to avoid the dangers of overpricing goods or services, with the accompanying dangers of corruption in a governmental organization. Variations £rom that requirement should be and are limited. Cf. 10 U.S.C. § 2304, 10 U.S. C.A. § 2304; see Report on Study of Armed Services Procurement Act, June 15, 1957. Here, although there was and is no suggestion of improper influence or unfair dealing, we conclude that the failure to meet by this contract the advertisement for proposals or to advertise again under the new Act makes the contract of 1950 invalid. 3. The next problem is what effect such invalidity has upon the services rendered by plaintiff and the expenses incurred by it on account of its undertaking. When the United States contracts, its rights and liabilities are the same as those of an individual, except it cannot be sued without its consent. When an individual or the Government rescinds a contract, the parties are to be placed, as far as possible, in the position they would have occupied without the transaction. So, in United States v. Bethlehem Steel Co., 258 U.S. 321, 42 S.Ct. 334, 66 L.Ed. 639, a contract implied in fact rather than a tortious use of a patent was found. In Clark v. United States, 95 U.S. 539, 542, 24 L.Ed. 518, the Supreme Court said this of an invalid parol contract: “We do not mean to say that, where a parol contract has been wholly or partially executed and performed on one side, the party performing will not be entitled to recover the fair value of his property or services. On the contrary, we think that he will be entitled to recover such value as upon an implied contract for a quantum meruit.” Here, as there was bona fide purpose to render services to the United States, as agreed to by the Postmaster General, we think the parties should be put substantially in the position they would have occupied without the attempted contract rather than a strict quantum meruit. 4. Our application of that conclusion leads to this. Plaintiff has been paid under the contract for services performed through December 31, 1953, except for December expenses. These payments it should retain. Plaintiff should recover its December expenses of $27,960.94, its January 1954 expenses of $6,241.69, its special franchise taxes for the second half of the 1953-54 tax year, $12,792.18. In our opinion, since the cost of electric power conversion was due solely to the requirements of the contract, the Government should reimburse that expense in accordance with the terms of the contract, i. e., $141,564.47. Plaintiff should also recover for the same reason the cost of the new set of carriers purchased for use on the system, $27,551.52. As the removal of equipment from Government-owned stations would have been necessary whether or not the contract had been made, that claim is denied. The counter-claims of the United States are dismissed. It is so ordered, LARAMORE and WHITAKER, Judges, concur. . See 32 Stat. 114; 34 Stat. 1211; 35 Stat. 412; 42 Stat. 661; 62 Stat. 1163; 64 Stat. 1118. . The present regulations seemingly do not provide this authority to discontinue contract routes. See 39 CFR (1955 Rev. Ed.) 97. It appears to have been eliminated November 20, 1954, 19 Fed.Reg. 6772, 6996. . See Chapman v. Sheridan-Wyoming Co., 338 U.S. 621, 629, 70 S.Ct. 392, 94 L.Ed. 393. . It merely amended the Acts of 1902, 1908, and 1922 by increasing the limitation on payments per mile. S.Rep. No. 1241, 80th Cong., 2d Sess.; H.R.Rep. No. 2093 and No. 2431, 80th Cong., 2d Sess. . “Sec. 2. Contracts for the transmission of mail by penumatic tubes or other mechanical devices shall be subject to the provisions of laws relating to the letting of mail contracts, „ except as otherwise provided in this Act.” . This was a case where the offer of the contractor set at naught the provisions of the specifications. If that were allowed, the Court said the contract would be “so irresponsive to and destructive of the advertised proposals as to nullify them, and therefore cause it to result that the contract was one made without competitive bidding which was necessary to give it validity.” . “The conclusion that, as matter of law, the bids thus obtained must be rejected and the whole thing done over again, merely because, at the time the bids were received, there was no specific provision of law authorizing the making of the contract contemplated, is not required or justified by any statute or by any fundamental principle of law.” 36 Op.Atty. Gen. 33, 38. . 64 Stat. 1118; S.Rep. No. 2500, 81st Cong., 2d Sess.; H.R.Rep. No. 3144, 81st Cong., 2d Sess. . Perry v. United States, 294 U.S. 330, 352, 55 S.Ct. 432, 79 L.Ed. 912; In re Floyd Acceptances, 7 Wall. 666, 675, 19 L.Ed. 169; Clearfield Trust Co. v. United States, 318 U.S. 363, 369, 63 S.Ct. 573, 87 L.Ed. 838; United States v. Standard Rice Co., 323 U.S. 106, 65 S.Ct. 145, 89 L.Ed. 104. . Neblett v. Macfarland, 92 U.S. 101, 103, 23 L.Ed. 471. Cf. Pan American Petroleum & Transport Co. v. United States, 273 U.S. 456, 505, 47 S.Ct. 416, 71 L.Ed. 734. But see Schneider v. United States, 19 Ct.Cl. 547, 551.
ILITTLETON, Judge (dissenting). I agree with the opinion of the majority that section 97.67(b) of the postal laws and regulations did not give the Postmaster General the right to cancel the contract in suit. I disagree with the holding of the majority that the contract between the Postmaster General and the plaintiff was invalid for lack of authority because the terms contained therein were not advertised to invite competitive bidding. The sense of the majority opinion, as 1 understand it, seems to me to be this: (1) the Postmaster General was required to advertise the terms of the contract In suit for the transmission of mail in New York City by pneumatic tube or other mechanical device by reason of (a) 39 U.S.C. § 429, 39 U.S.C.A. § 429, (b) by the pneumatic-tube statute in effect at the time of the purported advertisement in April 1950 (39 U.S.C. § 423, 39 U.S.C.A. § 423), (c) by the pneumatic-tube statute enacted on December 27, 1950 (64 Stat. 1118), and (d) by R.S. § 3709, 41 U.S.C.A. § 5, the general statute covering the necessity for advertising government contracts; (2) because the terms contained in the December 29, 1950 contract with plaintiff differed materially from the terms advertised on April 24, 1950, it follows that the contract with plaintiff was never advertised by the Postmaster General; (3) because the December 1950 contract with plaintiff was not advertised, it is invalid as having been entered into by the Postmaster General without authority and ■contrary to the above four laws; and (4) •although the contract is invalid because ■unauthorized and contrary to law, plaintiff may recover the value of its services because the record in the case establishes a bona fide purpose on the part of plaintiff to render service to the United States and on the part of the United States to receive and pay for such service. I am of the opinion that (1) under the facts and circumstances of this case, the four statutes cited by the majority did not require the Postmaster General to advertise the contract in suit; (2) that the contract in suit was fully authorized and valid, and (3) that the plaintiff is entitled to recover all sums due plaintiff under the terms of the contract at the time of its cancellation and also a sum representing the difference between the contract price and the operating expenses which plaintiff did not have to meet by reason of the fact that it did not have to render performance for the remaining seven years of the 10-year contract term. Were I to agree with the holding of the majority that the December 29, 1950 contract was invalid for lack of authority in the Postmaster General, I would be unable to agree with the conclusion reached by the majority that plaintiff is entitled to any recovery at all. I have always understood the general rule to be that lack of contracting authority in a Government agent renders unenforceable against the Government a contract made by such agent, whether that contract is express or implied in fact. Hooe v. United States, 218 U.S. 322, 31 S.Ct. 85, 54 L.Ed. 1055; United States v. North American Transportation & Trading Co., 253 U.S. 330, 40 S.Ct. 518, 64 L.Ed. 935; Sutton v. United States, 256 U.S. 575, 41 S.Ct. 563, 65 L.Ed. 1099; Baltimore & Ohio R. Co. v. United States, 21 U.S. 385, 43 S.Ct. 384, 67 L.Ed. 711. However, the courts have been reluctant to hold that a Government agent lacks authority to perform an act or to enter into a contract, in the absence of a clear statutory prohibition or limitation. See International Paper Co. v. United States, 282 U.S. 399, 51 S.Ct. 176, 75 L.Ed. 410; Portsmouth Harbor Land & Hotel Co. v. United States, 260 U.S. 327, 330, 43 S.Ct. 135, 67 L.Ed. 287; Winn-Senter Construction Co. v. United States, 75 F.Supp. 255, 110 Ct.Cl. 34; Larson v. Domestic & Foreign Commerce Corp., 337 U.S. 682, 69 S.Ct. 1457, 93 L.Ed. 1628 ; Whike Construction Co. v. United States, 140 F.Supp. 560, 135 Ct.Cl. 126. I see no justification in the facts of the instant case or in the applicable law for finding or implying any lack of authority in the Postmaster General to negotiate for the contract in suit. Four provisions of law are cited by the majority as requiring the Postmaster General to advertise the contract in suit. For the purposes of discussion I shall set forth below the pertinent provisions of the four statutes. For reasons which I shall discuss in some detail hereinafter, I am of the opinion that 39 U.S.C. § 429, 39 U.S.C.A. § 429, is not a provision of law requiring advertising, and that under the facts and circumstances of this case, none of the other three statutes set forth below required that this particular contract with plaintiff be advertised. (1) 39 U.S.C. § 429, 39 U.S.C.A. § 429, provides for the awarding of mail contracts, which have been advertised, to the lowest responsible bidder, as follows: “All contracts for carrying the mail shall be in the name of the United States and shall be awarded to the lowest responsible bidder tendering sufficient guaranties for faithful performance in accordance with the terms to the advertisement. Such contracts shall require due celerity, certainty, and security in the performance of the service; but the Postmaster General shall not be bound to consider the bid of any person who has willfully or negligently failed to perform a former contract.” [Italics supplied.] (2) The statute authorizing the Postmaster General to enter into contracts for the transmission of mail by pneumatic tubes or other mechanical devices, 39 U.S.C. § 423, 39 U.S.C.A. § 423, as that law stood prior to the December 27, 1950 amendment, provided as follows: “The Postmaster General may enter into contracts * * * for the transmission of mail by pneumatic tubes or other similar devices for a period not exceeding ten years, after ■public advertisement once a week for a period of six consecutive weeks in not less than five newspapers, one of which shall be published in each city where the service is to be performed. Contracts for this service shall be subject to the provisions of the postal laws and regulations relating to the letting of mail contracts, except as herein otherwise provided, and no advertisement shall issue until after a careful investigation shall have been made as to the needs and practicability of such service and until a favorable report, in writing, shall have been submitted to the Postmaster General by a commission of not less than three expert postal officials, to be named by him; nor shall such advertisement issue until in the judgment of the Postmaster General the needs of the Postal Service are such as to justify the expenditure involved. Advertisements shall state in general terms only the requirements tif the service and in form best calculated to invite competitive bidding. “The Postmaster General shall have the right to reject any and all bids; no contract shall be awarded except to the lowest responsible bidder, tendering full and sufficient guaranties to the satisfaction of the Postmaster General, of his ability to perform satisfactory service, and such guaranties shall include an approval bond in double the amount of the bid.” [Italics supplied.] (3) The pneumatic-tube contract statute which was in effect on the date the contract in suit was executed was the Act of December 27, 1950, 64 Stat. 1118, and it contained the following provisions with respect to advertisement: “ * * * the Postmaster General may enter into contracts for terms not exceeding ten years, for the transmission of mail by pneumatic tubes or other mechanical devices. “Sec. 2. Contracts for the transmission of mail by pneumatic tubes or other mechanical devices shall be subject to the provisions of laws relating to the letting of mail contracts, except as otherwise provided in this Act. Advertisements shall state in general terms only the re quirements of the service and shall be in the form best calculated to invite competitive bidding. The Postmaster General may reject any and all bids. No contract shall be awarded except to the lowest responsible bidder tendering full and sufficient guaranties to the satisfaction of the Postmaster General of Ms ability to perform satisfactory service.” [Italics supplied.] (4) R.S. 3709, as amended, 60 Stat. 809, 41 U.S.C. § 5, (1946 Ed.), 41 U.S. C.A. § 5, which is the general statute relative to the advertising of Government contracts, provides in pertinent part as follows: “Unless otherwise provided in the appropriation concerned or other law, purchases and contracts for supplies or services for the Government may be made or entered into only after advertising a sufficient time previously for proposals, except (1) when the amount involved in any one case does not exceed * * * (2) when the public exigencies require the immediate delivery of the articles or performance of the service, (3) when only one source of supply is available and the Government purchasing or contracting officer shall so certify, * * [Italics supplied.] With reference to the first statute set forth above (39 U.S.C. § 429, 39 U.S.C.A. § 429), I note that the majority characterizes that law as one of the “governing law[s] as to advertising of postal requirements.” I am of the opinion that the provision in question does not require the advertising of postal contracts, but rather requires the Postmaster General to award general mail letting contracts, which some other porvision of the postal laws requires to be advertised, to the lowest responsible bidder who tenders sufficient guaranties for faithful performance of the service desired, in accordance with the terms of the required advertisement. The postal law requirement for the advertising of general mail lettings is found in 39 U.S.C. § 421, 39 U.S.C.A. § 421, and I think that S^U.S.C. § 429, 39 U.S.C.A. § 429, has reference only to the award of general mail lettings which were required to be advertised, and had been advertised, under section 421 of the postal laws. The contract with this plaintiff did not involve a general mail letting, and I do not think that 39 U.S.C. §§ 421 or 429, 39 U.S.C.A. §§ 421 or 429, have any bearing on the issues of (1) whether the Postmaster General was required to advertise, or (2) whether the Postmaster General had authority to award the contract in suit without prior advertising. I think that we should look, first to the specific statute under which the Postmaster General purported to act when he contracted with this plaintiff on December 29, 1950, and from that statute determine the extent of, and the limitations on, his authority to contract at that time for the transmission of mail in New York City by pneumatic tube. At the time the contract in suit was advertised in April 1950, the pneumatic-tube statute then in effect did not require the Postmaster General to award the contract to the lowest responsible bidder tendering guaranties of faithful perfoririance “in accordance with the terms of the advertisement.” On the contrary, the pneumatic-tube statute merely stated that the Postmaster General should not award a contract to any but the lowest responsible bidder tendering full and sufficient guaranties “to the satisfaction of the Postmaster General of Ms ability to perform satisfactory service”. Nothing in that pneumatic-tube statute limited the Postmaster General’s contracting authority to a bidder who guaranteed performance in accordance with the terms of an advertisement. But the majority suggests that because the pneumatic-tube statute in effect at the time of the advertisement in April 1950, and prior to the date of execution of the contract, provided that the Postmaster General might enter into contracts for the transmission of mail by pneumatic tube “after public advertisement,” a contract executed by the Postmaster General which contained terms that had not been publicly adverted was not the sort of contract permitted by the statute, and was beyond the authority of the Postmaster General under that statute. Although I agree with Judge Madden that the pneumatic-tube law in effect prior to December 27, 1950, has no real bearing on the issues of this case, I am of the opinion that if the prior law has any effect it did not require the Postmaster General to issue a new advertisement covering the terms negotiated by the parties, which terms were different from those contained in the April 19501 advertisement. The prior pneumatic-tube law which was in existence at the time of the April advertisement, provided that the advertisement state in general terms■ only the requirements of the service for which the Postmaster General desired to contract. The issuance of the advertisement published by the Postmaster General in April 1950 complied in every respect with each provision of the pneumatic-tube law then in effect except that the terms of that advertisement were not general but, on the contrary, were extremely detailed. In my opinion, when a law requires advertisement in general terms only, it is the intention of the lawmakers to leave the detailed provisions of the contract open to negotiation by the authorized representative of the Government, particularly where that law does not require that the contract be awarded to the lowest bidder guaranteeing performance in accordance with the terms of the advertisement. That such was the intention of Congress in enacting the pneumatic-tube statute is demonstrated by the fact that in that statute the Postmaster General was not required to award a contract to the bidder who guaranteed performance in accordance with the terms of the advertisement as he would have been required to do in the case of a general mail letting contract under sections 421 and 429 of the postal laws. Accordingly, I am of the opinion that if the contract which was executed in December 1950 had contained general terms which were responsive to the general terms advertised, and detailed terms which had been negotiated between the parties, and all the terms had been within the limits of the pneumatic-tube statute then applicable, the contract would, have been fully authorized and valid. What actually happened in this caséis that the parties could not execute a. contract containing certain detailed provisions desired by both parties because-provisions in the existing pneumatic-tube-statute did not permit the Postmaster-General to agree to such terms. In general, the terms which the parties wished' to incorporate in the contract and which were contrary to the existing pneumatic-tube law, had to do with the amount of compensation the Postmaster General might commit the Government to pay for the service desired. Existing pneumatic-tube law contained a ceiling of' $12,000 on the rate per mile payable in> New York City, and the law also provided that contracts for pneumatic-tube-service were subject to annual appropriation acts for the Post Office Departments Both of these limitations had to be removed by Congress before the contract which plaintiff and the Postmaster General had agreed upon could be executed. Accordingly, the Postmaster General asked Congress to enact new penumatic-tube legislation raising the compensation rate per mile ceiling in New York City for 10 years from $12,000 to $15,500, and' eliminating the provision in existing law that contracts for pneumatic-tube service in New York City be subject to annual appropriations for the Post Office Department. The Postmaster General was willing that the $15,500 ceiling applicable to New York should revert to the-$12,000 ceiling at the expiration of the 10-year contract which he had negotiated with plaintiff. In the law which was enacted on December 27, 1950, Congress did both of these things. Following the passage of the December 27, 1950 pneumatic-tube statute, the Postmaster General and plaintiff executed the 10-year contract in suit. That contract contained many of the general provisions which had been advertised on April 24, 1950. It also contained terms as to payment and certain detailed terms regarding cancellation which had not been advertised -on April 24, 1950, but which terms had been negotiated by the parties during the months following the April 24, 1950 advertisement. Although none of the terms of the December 29, 1950 contract were in conflict with the law which was in existence on that date, the majority holds that the ■contract executed by plaintiff and the Postmaster General pursuant to that law was unauthorized and invalid because of the failure of the Postmaster General to issue a new advertisement containing terms which had not been previously advertised but which had been arrived at through negotiation. The majority opinion states categorically that the December 27, 1950 pneumatic-tube statute did nothing to change the advertising requirements which had been expressed in the prior pneumatic-tube statute, and, that if advertising was required under that prior law, it was equally required by the terms of the new statute enacted just before the contract in suit was executed. In my opinion, the December 27, 1950 pneumatic-tube statute made very material changes in the advertising requirements which had been contained in the prior law. The first, and perhaps the most important difference in the two pneumatic-tube statutes relative to advertising, is shown by the fact that the earlier law authorized the Postmaster General to enter into pneumatic-tube contracts “after public advertisement.” The December 27, 1950 statute contained no such provision. The •other changes in the advertising provisions of the earlier law follow logically from the omission in the 1950 statute ■of the requirement that contracts be entered into after public advertisement. The pneumatic-tube statute in effect prior to December 27, 1950 required (1) that before an advertisement could be made, the Postmaster General must secure a favorable report on the necessity for pneumatic-tube service from a corn-mission of three postal experts; (2) that following such favorable report, the service must be advertised publicly in general terms once a week for six consecutive weeks in five newspapers, one of which newspapers must be in each city where service was to be performed; (3) that no advertisement at all should issue until in the judgment of the Postmaster General the needs of the Postal Service were such as to justify the expenditure of the sums involved. None of those provisions were contained in the December 27, 1950 legislation, and they were omitted, in my opinion, because Congress knew that it was making no positive requirement in such legislation for public advertisement in all circumstances. Both the repealed and the new pneumatic-tube statutes provided that: “Advertisements shall state in general terms only the requirements of the service and [shall be] in the form best calculated to invite competitive bidding.” Insofar as the new pneumatic-tube statute is concerned, the above-quoted provision is the only place in the entire statute where the word “advertisement” is used. In my opinion, that provision in the new act should not be interpreted as a positive requirement for advertising, but rather as meaning that if the Postmaster General should decide that advertising was necessary, he should phrase his advertisement in general terms and in a manner best calculated to accomplish the purpose of any advertisement, i. e., to encourage competitive bidding. I am of the opinion that Congress was thinking of contracts for pneumatic-tube service in cities other than New York City when it enacted the above-quoted provision, and I think such an interpretation is justified by the legislative history of the 1950 act which I shall discuss later herein. I now come to the question whether or not the Postmaster General was free to decide, in each case and without any statutory limitation whatsoever, whether or not he would advertise for bids in connection with a pneumatic-tube mail transmission contract under the 1950 act. I think it is clear that the 1950 act did not expressly require the Postmaster General to advertise for bids, and, as pointed out earlier herein, I do not consider section 429 of the postal laws to be a requirement for advertising. I am of the opinion, however, that R.S. § 3709 relating to the general law of advertising government contracts was binding upon the Postmaster General in connection with any contract he might wish to make for the transmission of mail by pneumatic tube in New York City or elsewhere. I agree with the majority that the general advertising requirements of R.S. § 3709 represent a rule of necessity designed to secure for the Government the best possible services at the lowest possible prices by inviting open, active competition. R.S. § 3709 provides that, unless otherwise provided by law, contracts for supplies or services for the Government may be entered into only after advertising a sufficient time previously except in certain specified instances. The 1950 pneumatic-tube statute did not expressly “otherwise” provide. In fact, that statute was very nearly silent on the subject of advertising, and the courts and the Attorney General have held that the Postmaster General is bound by the provisions of R.S. § 3709 in the absence of specific postal legislation to the contrary. Presumably Congress was aware of this fact when it enacted the 1950 pneumatic-tube statute without including therein any positive provision requiring advertising. Accordingly, unless the facts of this case establish that it falls within one of the exceptions provided in R.S. § 3709, I am of the opinion that the Postmaster General was required to advertise the contract in suit, many of the important terms of which were never advertised for public competitive bidding. In my opinion, the facts and circumstances of the instant case, as revealed by the findings of the court, establish that one, and possibly two, of the exceptions provided for in R.S. § 3709 existed to relieve the Postmaster General of the legal necessity for advertising this contract. The strongest case has been made for the exception which provides as follows: “(3) when only one source of supply is available and the Government purchasing or contracting officer shall so certify, * * * ” The above exception contains two elements: (1) that only one source of supply is available, and (2) that the Government contracting officer shall so certify. As to whether or not there was but one source of supply in this case, the record establishes conclusively and the court has found as a fact, that there was only one source in New York City from which the Postmaster General might secure the transmission of the mails by pneumatic tube or other mechanical device, and that source of service was the plaintiff company. For many years prior to the execution of the contract in suit, the Postmaster General had contracted with plaintiff and its predecessors in interest as the owners of the one and only pneumatic-tube mail transmission system in existence in New York City. By the time of this contract, many miles of tube had been installed connecting twenty-two Government post offices in the city. Although the mails could have been transmitted in New York by means other than by pneumatic tube, and, in fact, a substantial portion of New York City mails had for years been transported by truck, Congress had by law given to the Postmaster General the authority to enter into contracts for the transmission of mail by pneumatic tube if, in the opinion of the Postmaster General, the needs of the postal service justified the use of that means of transportation and the expense involved in employing such means. Where, as here, competitive bidding for the service desired was an utter impossibility, and where the Government contracting officer was vested with full authority to contract for the desired service, both reason and the express terms of R.S. § 3709 impel one to the conclusion that a valid and legal contract with the one firm equipped to furnish the service may be negotiated without resort to the needless expense of advertising to invite nonexistent competition. I am under the distinct impression that the majority has been influenced by the fact that the Postmaster General may have acted unwisely in deciding to continue the use of pneumatic tubes for the transmission of mail in New York City in 1950. The various pneumatic-tube statutes in effect prior to December 27, 1950, contained certain limitations on the discretion vested in the Postmaster General which were not included in the 1950 statute. One of those limitations was that before the Postmaster General could advertise for bids for such service he must secure a favorable report from a commission of three postal experts on the necessity and desirability of such a service. Before making the April 24, 1950 advertisement, the Postmaster General did secure such a favorable report and, accordingly, I am of the opinion that he scrupulously complied with all of the provisions of the pneumatic-tube law as it then existed. It is true that the commission of postal experts which had rendered the favorable report, later, on two separate occasions, rendered supplemental reports indicating that because of recent improvements in the facilities of the mail trucking service in New York City, the mails might be more economically transported by motor truck than by pneumatic tube. These supplemental reports were rendered to the Assistant Postmaster General who transmitted them to the Postmaster General for his information. However, I am of the opinion that once the commission of postal experts had rendered its statutory report and the Postmaster General had acted upon it by advertising the contract in April 1950, that commission was functus officio, and its subsequent actions and reports could not, as a matter of law, have any binding effect on the Postmaster General. After receiving the favorable report of the commission, the Postmaster General arrived at the determination required of him by the statute then in effect, that in his judgment the needs of the postal service justified the expenditure which would be involved in executing a new contract for the transmission of the mails in New York City by pneumatic tube; and upon receiving the supplemental adverse reports after the April 1950 advertisement had issued, the Postmaster General continued to be of the same opinion, and so certified to Congress that this contract with plaintiff should be negotiated. From the point of view of hindsight, this court may believe that the Postmaster General acted unwisely in not heeding the adverse supplemental reports of the commission and in not rejecting plaintiff’s bid. But the decision to secure the type of service here involved was by statute committed to the discretion of the Postmaster General and not to the Federal courts. If that discretion was exercised within the limitations imposed by applicable law, as it was in this case, and if the contract ultimately executed was in conformity with the law in existence at the time of such execution, as this one was, then I am of the opinion that there is nothing the courts can or should do about the contract except enforce it. The various comments contained in the majority opinion concerning the availability 'of trucks to deliver the mails in New York City, the fact that the Postmaster General might have secured a short extension of the current pneumatic-tube contract for a period beyond December 31, 1950, sufficient to permit a new advertisement to issue or to permit a further investigation into the wisdom of abandoning completely that system, and the suggestion that mail delivery in New York City would not have broken down entirely if delivery of the mail by pneumatic tube had ceased on December 31, 1950, are all matters which I consider to be beyond the legitimate or proper consideration of this court and to have no bearing on the issue of whether or not the Postmaster General acted beyond the authority vested in him by the Act of December 27, 1950. In connection with the above-mentioned suggestions of the majority as to what the Postmaster General might and perhaps should have done, the case of United States v. Speed, 8 Wall. 77, 83, 19 L.Ed. 449, is cited. I am somewhat at a loss to understand the purpose for which the Speed case is cited since in my opinion the holding of the Court in that case is quite favorable to plaintiff herein. In the Speed case, the Government, appealing from a judgment for plaintiff in the Court of Claims, urged that the contract in suit was unenforceable and not binding upon the United States because no advertisement for proposals to contract had been issued as required by the Act of March 2, 1861, 12 Stat. 220. The Supreme Court held that while the statute in question required advertisement as a general rule, it also “ * * * invests the officer charged with the duty of procuring supplies or services with a discretion to dispense with advertising, if the exigencies of the public service require immediate delivery or performance. “It is too well settled to admit of dispute at this day, that where there is a discretion of this kind conferred on an officer, or board of officers, and a contract is made in which they have exercised that discretion, the validity of the ■ contract cannot be made to depend on the-degree of wisdom or skill which may have accompanied its exercise.” [Italics supplied.] In the instant case, the fact that trucks-might have been used more economically than pneumatic tubes for the transmission of mail in New York City, is a fact which reflects on the degree of wisdom, or skill accompanying the exercise of the discretion lodged in the Postmaster General by the pneumatic-tube law and by the general advertising statute, and the validity of the contract he entered into is not dependent on the degree of wisdom or skill which he exercised. Since the 1950 act did not contain art affirmative and positive requirement that the Postmaster must advertise for bids to furnish pneumatic-tube service in New York City, and since the general advertising statute (R.S. § 3709) provided an exception to the necessity for advertising in the case where there exists but one supplier for the service desired, I am of the opinion that the Postmaster General acted entirely within the grant of authority contained in the 1950 act and within the provisions of R.S. § 3709 when he executed the contract in suit without advertising the terms therein which had not been been previously advertised. But the opinion of the majority holds that even though the contract in suit may not have been required to be advertised, once it was advertised in April 1950, the Postmaster General was prohibited by law from awarding a contract which contained terms -different from those advertised. In other words, by issuing the advertisement for contract services in a situation where, under R.S. § 3709, he was not required to advertise, the Postmaster General lost the benefit of the exceptions contained in R.S. § 3709 and thereafter was required to proceed as though he had been required to issue the advertisement in the first place. This would mean, that having needlessly advertised for bids, the Postmaster General could only award a contract on terms which were identical with the terms in that needless advertisement, and if he entered into a contract whose terms varied materially from the terms needlessly advertised, that contract is void and unenforceable for lack of authority, unless he makes another useless advertisement of such new terms. I am unable to agree with such a proposition and I do not think that the opinion of the Attorney General reported at 36 Op.Atty.Gen. 33, cited in the majority opinion, lends any support to that holding. In the case presented to ‘the Attorney General, the Postmaster General advertised for proposals for the transmission of the mail by aircraft on a certain route from the Canal Zone to points in South America and return. The advertisement for bids specified a price basis and a route not authorized by existing law. Five companies submitted proposals. Subsequently, at the request of the Postmaster General, Congress enacted new legislation which permitted the Postmaster General to contract for the new route and at the higher rates previously advertised. Thereafter, the Postmaster General awarded the contract to the lowest bidder of the five who had submitted bids prior to the enactment of the new legislation. One of the unsuccessful bidders protested the award on the ground that the contract awarded was void because, at the time the bids were invited and received, there was in effect no statute which authorized the Postmaster General to make the contract contemplated by the advertisement. The Attorney General observed that there was, at the time of the advertisement, no statute of general application which prescribed any particular method to be followed in inviting bids for postal delivery except R.S. § 3951, 39 U.S.C.A. § 434, relating to “general mail lettings,” and he was of the opinion that a contract for the transportation of mail by aircraft was not a “general mail letting.” He noted that the pneumatic-tube statute then in existence prescribed the precise manner in which advertisements for that service should be made and that the statute authorizing contracts for transportation of the mail by aircraft did not mention the manner of advertising. The Attorney General concluded that R.S. § 3709 rather than the general mail letting statute was applicable to such contracts* Conceding that R.S. § 3709 required the airmail contract to be advertised and that the advertisement which issued contained terms not then sanctioned by law, the Attorney General held that the purpose of R.S. § 3709 was accomplished if competitive bidding had not been actually discouraged by the Postmaster General* The Attorney General also stated that he could readily conceive of a case where uncertainty in ultimately obtaining statutory authority for the terms advertised might be great, and that the expense to bidders of making bids or putting themselves in a position to perform the contract would be so great that the possibility that a contract might never be awarded through lack of statutory authority, would seriously restrict competition. The Attorney General found, however, that in the case under his consideration, there appeared to be no circumstances which would justify the conclusion that “responsible concerns equipped to perform the contract were deterred from-entering the competition by any uncertainty as to whether statutory authority would be obtained.” I cannot agree with the statement of the majority herein that the Attorney General in the above opinion based his conclusion as to the validity of the aircraft transportation contract on the fact that the bids had been responsive to the terms of the advertisement. I think he based his conclusion that the contract was valid on his finding that no qualified and responsible bidder was deterred from entering the competition within the meaning of R.S. § 3709 under the facts and circumstances of that case. And I think that in the instant case, the facts and circumstances show even more clearly that no responsible or qualified concern was prevented from entering the competition to render the service sought by the Postmaster General because of the failure of the Postmaster General to advertise the terms ultimately incorporated in the December 29, 1950 contract with plaintiff herein. I now come to the second element of exception (3) of R.S. § 3709, i. e., that the fact of only one source of supply be certified by the Government contracting officer. The statute does not say what form that certification must take nor to whom it must be made, and we are accordingly at liberty to place a reasonable construction on the language used in the statute. If the contract in suit had been negotiated by an inferior official of the Post Office Department, I suppose that official would have had to certify the fact of “one source of supply” to the Postmaster General as the head of the department. But the Government contracting officer in this case was the Postmaster General himself. From the outset, he appears to have handled all the negotiations personally, and I would think that in executing the contract on December 29, 1950, without advertising the new terms therein, his very act of such execution amounted to a certification by him that to the best of his knowledge the plaintiff was the only source of supply for the service which was the subject matter of the contract. Since the contracting officer in this case was the head of the department, I can think of no one to whom he might make such a certification unless he made it to Congress, from which body his authority to contract emanated. In my opinion, the Postmaster General did make such a certification to Congress in his identical letters to the Speaker of the House and to the Vice President, asking for legislation to permit him to enter into this very contract. If the Postmaster General had not required new legislation, a simple written statement that there was only one source of supply, placed in the files of the Post Office Department, would have been a sufficient compliance with exception (3) above. The legislative history of the December 27, 1960 statute shows that the Postmaster General had advised Congress of his wish to enter into a contract for the transmission of mail in New York City with the New York Mail and Newspaper Transportation Company, the plaintiff herein, and that unless the legislation which he ■ was requesting were enacted before the current contract expired on December 31, 1950, there would be a cessation of mail service to that extent in New York City. I am of the opinion that the legislative history which I am about to discuss not only indicates that the Postmaster General certified to Congress that there was only one concern qualified to render pneumatic-tube service in New York City, but also that Congress by enacting the 1950 act intended that the contract between the Postmaster General and this plaintiff might be executed without previous advertising. The following statement appears in House Report No. 3144, dated December 5, 1950, 81st Congress, 2d Session, page 4261, on S. 4102 which became the Act of December 27, 1950: “This bill will permit the Postmaster General to enter into contracts for terms of not to exceed 10 years (the terms now authorized by law), for the transmission of mails by pneumatic tubes or other mechanical devices. The maximum per annum rate authorized to be paid for such service at New York would be increased from not to exceed $12,000 per mile to not to exceed $15,500 per mile for a period of 10 years, after which time the annual rate of expenditures per mile shall not exceed $12,000. “The owners of the pneumatic tube system in New York City must convert the system from nonstandard direct current to standard alternating current. The source of power supply, the Consolidated Edison Co. of New York, Inc., has requested that it be advised on or before December 31, 1950, whether or not the power machinery operating the pneumatic tube system will be converted to the use of alternating current. If this concern is notified that the conversion will be made, then it will continue to supply nonstandard direct current for a reasonable length of time in order to permit the work of making the conversion to be completed. “The exact cost of the conversion cannot be determined accurately without detailed field investigation, but it is estimated that the conversion cost will approximate $300,000. The owners of the tube system operating in the city of New York, the New York Mail and Newspaper Transportation Co., cannot absorb the expense of making the conversion of the machinery, pay operating and maintenance expenses and obtain a fair profit on its capital outlay at the existing statutory rate of pay, namely, $12,000 per mile. “The per annum rate paid at other cities for the transmission of mails by pneumatic tubes will be at the most favorable rates obtainable, subject to amounts appropriated therefor by Congress. “The bill also clarifies existing law with respect to such pneumatic tube contracts. These contracts expire December 31, 1950, and expeditious action on this legislation is required in order that its terms may be utilized in negotiations for the new contract. “ if * * The legislation has the approval of the Bureau of the Budget and was introduced at the request of the Post Office Department.” [Italics supplied.] The statement quoted above was followed in the report by the letter of August 25, 1950, from the Postmaster General to the Speaker of the House, urging that the proposed legislation be enacted during the present session of Congress because the existing contract would expire on December 31, 1950. When, on September 13, 1950, the bill was brought up on the floor of the Senate for a vote, Senator Humphrey stated that unless the bill was passed, the entire transmission of mail by pneumatic tube in the Manhattan district and the general New York area would be interrupted and severely damaged. In answer to a question concerning the increased cost under the bill, Senator Humphrey stated that the bill had been adopted unanimously by the Senate Committee which had understood that it was imperative that the bill be passed quickly. He stated at page 14665 of the Congressional Record, Yol. 96, Part 11: “ * * * That is why I, as the chairman of the subcommittee, introduced it, in order to carry on the mail service in the New York area. “Mr. Langer. Can the Senator tell us the total amount the company is receiving from the Government? [meaning the plaintiff company supplying service in New York]. “Mr. Humphrey. I do not recall that we have that figure. I will check the report. Yes; the last figure we have is $513,911.50, which includes power, labor, and all operatin