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COMMONWEALTH PENNSYLVANIA v. AMERICAN ENERGY SERVICES (06/18/85)

decided: June 18, 1985.

COMMONWEALTH OF PENNSYLVANIA, GOVERNOR'S ENERGY COUNCIL, PETITIONER
v.
AMERICAN ENERGY SERVICES, INC., RESPONDENT



Appeal from the Order of the Board of Claims in the case of American Energy Services, Inc. v. Commonwealth of Pennsylvania, Governor's Energy Council, Docket No. 654.

COUNSEL

Roger E. Clark, Acting Chief Counsel, for petitioner.

C. Grainger Bowman, McNees, Wallace & Nurick, for respondent.

Judges Rogers and Barry and Senior Judge Barbieri, sitting as a panel of three. Opinion by Judge Rogers. Judge Palladino did not participate in the decision in this case.

Author: Rogers

[ 90 Pa. Commw. Page 169]

The Commonwealth of Pennsylvania, Governor's Energy Council (GEC) has filed a petition for review of a judgment in the amount of $22,747.60 and interest, entered against "Commonwealth of Pennsylvania, Governor's Energy Council" and in favor of American Energy Services, Inc. (AES) by the Board of Claims. AES had sued GEC for damages caused by GEC's asserted breach of a contract for services.

The GEC is an agency of the Commonwealth of Pennsylvania created by an executive order of the Governor "to insure the proper management and energy use throughout the Commonwealth." AES is a corporation engaged in counseling businesses in the use of computers for the management of data related to the conservation of energy.

By stipulation of facts and from uncontested evidence received by the Board of Claims, we learn that: In November, 1978, GEC requested competitive bids

[ 90 Pa. Commw. Page 170]

    for the development and implementation of a residential energy analysis computer program to be used in conjunction with the Governor's Energy Hotline, a toll-free telephone information service provided by GEC to residents of the Commonwealth. AES submitted a timely bid and, by letter dated January 9, 1979, Ronald E. Gargasz, GEC's Chief Contracting Officer, informed Michael Mark, the president of AES, that AES' bid had been accepted. Shortly thereafter, Mr. Mark received a telephone call from Mr. Gargasz informing him that the contract had been mailed to AES, that it was imperative that AES begin working on the project immediately, and that GEC would reimburse AES for its expenses in the event that final approval of the contract was not obtained. On January 26, 1979, Mr. Gargasz sent Mr. Mark the contract accompanied by a letter requesting that Mr. Mark review the contract, sign it, and return it to GEC. The letter further provided that:

It is essential that you return your signed contract as soon as possible so that we may obtain the remaining signatures required within the state process. Although this process will take four to six weeks to complete, this letter serves as authorization for all documented expenditures drawn against the contract as of the effective date, February 1, 1979.

Mr. Mark signed the contract, returned it to Joseph Toia, the Budget Director of GEC, who also signed it and then forwarded it for additional signatures in the state process. Because GEC's contract with AES was to be funded by the federal government, it was required to be submitted to the United States Department of Energy (DOE) for its review and approval.

In February, 1979, after receiving assurances from Gargasz that approval of the contract by DOE was a "mere formality," ...


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