armament, equipment, and employment of vessels of war, as well as all other matters connected with the naval establishment of the United States." 1 Stat. 553. 1 Stat. 553. The power of the President in such cases is, of course, limited by the legislation of Congress. That legislation existing, the discharge of the duty devolving upon the secretary necessarily requires him to enter into numerous contracts for the public service; and the power to suspend work contracted for, whether in the construction, armament, or equipment of vessels of war, when from any cause the public interest requires such suspension, must necessarily rest with him. As, in making the original contracts, he must agree upon the compensation to be made for their entire performance, it would seem, that, when those contracts are suspended by him, he must be equally authorized to agree upon the compensation for their partial performance. Contracts for the armament and equipment of vessels of war may, and generally do, require numerous modifications in the progress of the work, where that work requires years for its completion. With the improvements constantly made in ship-building and steam-machinery and in arms, some parts originally contracted for may have to be abandoned, and other parts substituted; and it would be of serious detriment to the public service if the power of the head of the Navy Department did not extend to providing for all such possible contingencies by modification or suspension of the contracts, and settlement with the contractors.

When a settlement in such a case is made upon a full knowledge of all the facts, without concealment, misrepresentation, or fraud, it must be equally binding upon the Government as upon the contractor; at least, such a settlement cannot be disregarded by the Government without restoring to the contractor the property surrendered as a condition of its execution.

But aside from this general authority of the Secretary of the Navy, under the orders of the President, he was, during the rebellion, specially authorized and required by acts of Congress, either in direct terms or by specific appropriations for that purpose, to construct, arm, equip, and employ such vessels of war as might be needed for the efficient prosecution of the war. In the discharge of this duty, he made the original contracts with the claimant. The completion of the machinery contracted for having become unnecessary from the termination of the war, the secretary, in the exercise of his judgment, under the advice of a board of naval officers, suspended the work. Under these circumstances, we are of opinion that he was authorized to agree with the claimant upon the compensation for the partial performance, and that the settlement thus made is binding upon the Government.

Decree affirmed.

In May 1956 the Corps of Engineers advertised for bids on 3,567 generator sets to be purchased by the Army. The invitation stated that "the Government desires delivery" of the items in accordance with a definte schedule (ranging from September 30, 1956, to August 31, 1957), but it was also provided that "in the event bidder is unable to make deliveries in accordance with the foregoing schedule, he shall set forth in the space below his proposed delivery schedule." Immediately beneath this blank space for the bidder's own delivery schedule, the form declared:

"Bids offering a proposed delivery schedule which will extend the time for the delivery of the quantities as called for in any delivery period of the foregoing delivery schedule by more than 60 days, may be cause for rejection of bid [emphasis added]."

Plaintiff John Reiner & Company submitted a bid with its own delivery schedule specifying dates more than 60 days after those listed by the Government in the invitation. When the bids were opened on June 21, 1956, Reiner was the lowest in price of the thirteen bidders. Seven others proposed their own delivery schedules, some (like Reiner) offering delivery dates more than 60 days beyond the invitation times. The Corps of Engineers then inquired of the requisitioning agency (the Signal Corps) whether plaintiff's schedule was satisfactory and met its requirements. Upon receiving an affirmative reply, the Engineers notified plaintiff by telephone, on June 29, 1956, that its bid had been accepted; this was followed by a written notice of award received on July 2, 1956. The formal contract came shortly thereafter.

Plaintiff proceeded to negotiate with suppliers of the main components of the generator sets and to incur certain other limited costs under the contract. Before it was well launched, however, it received word from the defendant (on August 3, 1956) to suspend all operations under the contract until further notice and to inform its suppliers and subcontractors accordingly. This came about because, unknown to plaintiff, an unsuccessful bidder had prevailed upon the General Accounting Office to rule that the award was improper and the contract should be cancelled. That Office felt that the invitation did not adequately inform bidders as to how they should bid with respect to delivery dates.

Plaintiff's efforts to have the Comptroller General's decision reversed were fruitless, and on September 21, 1956, the contracting officer informed plaintiff that in compliance with the ruling its contract was cancelled. On September 24th, Reinter replied that the Comptroller General's decision was not binding on the Army and that the contractor considered the cancellation a breach for which it would seek recovery of full damages. This suit was then brought for breach of the contract.

I

The initial question is whether the award was illegal and void so that the plaintiff cannot found a court action upon it. This inquiry, we believe, is not precisely the same as that with which the Comptroller General dealt. Because of his general concern with the proper operation of competitive bidding in Government procurement, he can make recommendations and render decisions that, as a matter of procurement policy, awards on contracts should be cancelled or withdrawn even though they would not be held invalid in court. He is not confined to the minimal measure of legality but can sponsor and encourage the observance of higher standards by the procuring agencies. Courts, on the other hand, are restricted, when an invitation or award is challenged, to deciding the rock-bottom issue of whether the contract purported to be made by the Government was invalid and therefore no contract at all--not whether another procedure would have been preferable or better attuned to the aims of the competitive bidding legislation.

In testing the enforceability of an award made by the Government, where a problem of the validity of the invitation or the responsiveness of the accepted bid arises after the award, the court should ordinarily impose the binding stamp of nullity only when the illegality is plain. If the contracting officer has viewed the award as lawful, and it is reasonable to take that position under the legislation and regulations, the court should normally follow suit. Any other course could place the contractor in an unfortunate dilemma. If he questions the award and refuses to accept it because of his own doubts as to possible illegality, the contracting officer could forfeit his bid bond for refusing to enter into the contract. The full risk of an adverse decision on validity would then rest on the bidder. If he accedes to the contracting officer and commences performance of the contract, a subsequent holding of nonenforceability would lead to denial of all recovery under the agreement even though the issue of legality is very close; and under the doctrine of quantum meruit there would be no reimbursement for expenses incurred in good faith but only for any tangible benefits actually received by the defendant. United States v. Mississippi Valley Generating Co.,

364 U.S. 520, 566 n. 22, 81 S. Ct. 294, 5 L. Ed. 2d 268 (1961); Clark v. United States, 95 U.S. 539, 542, 24 L. Ed. 518 (1877). It is therefore just to the contractor, as well as to the Government, to give him the benefit of reasonable doubts and to uphold the award unless its invalidity is clear. Cf. 17 Comp. Gen. 53, 54-55 (1937).

On

Applying that norm, we cannot deem this award to have been a nullity. Reiner's bid was responsive to the invitation which allowed the bidders to set their own delivery schedules and went no further than to caution that schedules extending the time over 60 days beyond that designated in the defendant's preferred ("desired") schedule might be cause for rejection. There was no statement of indication that time was of the essence. other occasions plaintiff, answering the same type of invitation, had proposed schedules extending the procurement agency's desired schedule by more than 60 days and had been granted the contracts. This was an accepted form for procurement by the Corps of Engineers. There was no reason to think that in this particular invitation "may be cause for rejection" (emphasis added) meant "will" or "shall" be cause for rejection.

But, defendant urges, this very provision, with its implicit permission to propose longer schedules, vitiated the invitation. The "full and free competition" envisaged by the Armed Services Procurement Act of 1947, § 3, 62 Stat. 21, 22-23, as amended, 69 Stat. 551-52 (1955), 41 U.S.C. § 152 (1952 ed.), was stifled, it is said by allowing bidders to present their own delivery program, no matter how protracted. One charge levied against this phase of the invitation is that it was so worded that bidders would not understand that they could depart from the listed schedule by more than 60 days. This does not seem probable. The form used the permissive word "may" instead of the mandatory "will" or "shall"; its ordinary meaning would be that bidders took their chances in offering a too-extended schedule but were not barred from shouldering that risk. In previous uses of this standard form bidders had apparently not felt themselves limited to a deviation of 60 days; in this very case others than Reiner extended their suggested dates for more than that period. There is no showing that any bidder was actually misled. Like much procurement prose, the delivery section of the invitation was not a stylist's model, but we think it conveyed its meaning sufficiently to ward off the charge of undue ambiguity.

The second vice defendant marks in the invitation is that it left both bidders and the contracting officer too much at large. The latter might or might not accept a lower bid with an extended delivery schedule, rather than a "timely" one at a higher price. From the viewpoint of improving procurement procedures, the Comptroller General could well believe that some method of evaluating the bids according to both price and delivery dates should have been explicitly stated. That defect, however, was not so deep or so clear that it nullified the invitation as a matter of law. The bidders were not helpless. They were free to submit more than one bid if the delivery schedule affected their price proposals; they could file, if they wished, one price based on the Government's schedule, another on an extension of less than 60 days, and a third on an extension of over 60 days. The contracting officer, for his part, would be guided by the directives in the Procurement Act of 1947 to consider "the requirements of the agency concerned" and the bid which was "most advantageous to the Government, price and other factors considered." 62 Stat. 23, 41 U.S.C. § 152 (a), (b) (1952 ed.). To the

extent that quicker delivery was called for by the procuring agency, the contracting officer would evaluate on the basis of price those bids meeting the earlier delivery requirement; if a delayed schedule turned out to be acceptable, the other bidders would enter the widened circle of competition. That would be the natural and proper way to proceed and that is the way the contracting officer did proceed. The Procurement Act was designed to leave to him business discretion of this type and measure. See S. Rep. No. 571, 80th Cong., 2d Sess., pp. 2-3. In the circumstances present here, the contracting officer did not assume for himself so great an area of judgment as to destroy the free competition (on a common basis) the statute demands. We hold, accordingly, that the award to plaintiff must be deemed lawful, not void.

II

The next inquiry concerns the nature of the cancellation resulting from the Comptroller General's ruling and the damages to which the contractor is entitled. Plaintiff characterizes the cancellation as a clear breach, entailing the full common-law measure of recovery; it points out that the contracting officer did not purport to terminate the contract for the Government's convenience or to follow the procedures established for that kind of termination. Those were in fact the circumstances of the cancellation but the plaintiff's conclusion does not necessarily follow.

If the contracting officer had deliberately employed the terminationfor-convenience article of the contract, his action would have been entirely valid. Such termination is authorized "whenever the contracting officer shall determine" that it is "in the best interests of the Government." The broad reach of that phrase comprehends termination in a host of variable and unspecified situations calling (in the contracting officer's view) for the ending of the agreement; the article is not restricted, as plaintiff contends, to a decrease in the need for the item purchased. Under such an all-inclusive clause, the Government has the right to terminate "at will" (David Sewing Mach. Co. v. United States, 60 Ct. Cl. 201, 217 (1925), aff'd, 273 U.S. 324, 47 S. Ct. 352, 71 L. Ed. 662 (1927); Librach v. United States, 147 Ct. Cl. 605, 611 (1959)), and in the absence of bad faith or clear abuse of discretion the contracting officer's election to terminate is conclusive. See Line Constr. Co. v. United States, 109 Ct. Cl. 154, 187 (1947).

Here, termination would have been invoked in deference to the Comptroller General's declaration that the contract should be cancelled. The contracting officer did not agree with that opinion, but it is the usual policy, if not the obligation, of the procuring departments to accommodate themselves to positions formally taken by the General Accounting Office with respect to competitive bidding. That Office, as we have pointed out, has special concern with, and supervision over, that aspect of procurement. It would be entirely justifiable for the contracting officer to follow the general policy of acceding to the views of the Accounting Office in this area even though he had another position on the particular issue of legality or propriety. He would not be allowing the Comptroller General to dictate the termination of the contract but, rather, would be using termination as a means of minimizing a conflict with another arm of Government properly concerned with the contractual problem. It cannot be contrary to "the best interests of the Government"-