The opinion of the court was delivered by: Robert D. Morgan, District Judge.
This cause comes before the Court on plaintiff's motion for
summary judgment, raising the sole question of whether "* * *
the pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any, show
that there is no genuine issue as to any material fact and
that the moving party is entitled to a judgment as a matter of
law." Rule 56, Federal Rules of Civil Procedure.
This suit is brought under the Miller Act, 40 U.S.C. § 270a,
270b (1964). This Act is highly remedial in nature to assure
the payment of federal subcontractors and "is entitled to a
liberal construction and application." MacEvoy v. United
States, for Use and Benefit of Calvin Tomkins, 322 U.S. 102,
107, 64 S.Ct. 890, 893, 88 L.Ed. 1163 (1944).
A great many facts are admitted and therefore not in
dispute. Among such are the following: On or about July 6,
1966, the real plaintiff herein, J.C. Schaefer Electric, Inc.
(herein called Schaefer), orally communicated a "bid" to the
president of defendant Heinz of $508,800.00, plus $28,740.00
for alternative "A", to perform the electrical work required
on a proposed construction project on which Heinz was
submitting a general contractor's bid to the United States. On
July 7, 1966, Heinz submitted its bid and named Schaefer
therein as the proposed electrical subcontractor. Heinz
thereby became the successful bidder on the government
contract. Shortly thereafter, O. Frank Heinz, president of
defendant Heinz, orally asked Schaefer to reduce the amount of
its bid for the electrical work and Schaefer refused. On
August 2, 1966, defendant Heinz filed with the contracting
officer of the General Services Administration a request to
permit Heinz to change the electrical subcontractor in his
bid. Under the government contract terms this may be done only
with government consent. This request was initially denied
1966, with final denial ordered October 20, 1966.
On August 12, 1966, defendant Heinz entered into a
construction contract with the United States, acting by and
through the Public Building Service of the General Services
Administration. Thereafter, defendants American Casualty
Company of Reading, Pennsylvania, and National Fire Insurance
Company of Hartford entered into a Payment Bond as sureties
for defendant Heinz.
On November 2, 1966, Schaefer received from defendant Heinz
a message on corporate paper and signed by the vice president
of Heinz which stated:
"Confirming my phone conversation with you of
today — we will write you an order to proceed with
Base Bid & Alternative `A' work for the quoted
price. * * * You will receive our order this week.
In the meantime you will proceed with the work. * *
On or about November 2, 1966, Schaefer, with the knowledge and
consent of defendant Heinz and under the above quoted
authority, commenced to perform the subject electrical work.
On November 8, 1966, Schaefer received a purchase order
numbered GSA-95-125 which contained therein the following
"This contract is subject to the possible
termination which may result from a pending
appeal to the Board of Contract Appeals of the
General Services Administration of the United
States Government; which appeal filed on October
27, 1966, by O. Frank Heinz Construction Company,
Inc., seeks the right to substitute a
subcontractor for all or a part of the work and
materials referred to in this Purchase Order.
"Acceptance of this contract constitutes
acceptance of said condition of substitution."
These terms were unacceptable to Schaefer and an amended
purchase order was requested by letter which, in pertinent
"Fourth: * * * It should be obvious
that we can not become committed to
purchase materials for this job nor to
start the same under the threat of
possible termination through the appeal
which you mentioned. We had thought all
difficulties relating to this matter
were fully settled.
"We shall expect an amended Purchase Order to be
sent to us promptly, taking care of ...