_____________________________________ DENIED: October 29, 1998 _____________________________________ GSBCA 11389 CENTENNIAL LEASING, Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Peter DeVito, President of Centennial Leasing, Wall, NJ, appearing for Appellant. Edmund W. Chapman, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent. Before Board Judges LaBELLA, Acting Chief Judge, BORWICK, and HYATT. Board Judge BORWICK. Background Appellant, Centennial Leasing Corporation (Centennial), seeks $21,250 for the Department of the Navy's (Navy) alleged damaging of trucks leased to the Navy from July of 1986 through July of 1989 by delivery orders issued pursuant to a Federal Supply Schedule contract. The General Services Administration (GSA) contracting officer denied Centennial's claims for damages. We sustain the decision of the contracting officer. The contract provided that the Government was liable only for damages listed on appraisal reports beyond normal wear and tear. Centennial's agent provided the Navy with appraisal reports stating that the vehicles suffered no damage beyond normal usage. Centennial is bound by the statements of its agent, and the contract provides no basis for recovery for damage beyond normal wear and tear. Therefore, the appeal is denied. Findings of Fact 1. On March 27, 1986, GSA awarded appellant Contract No. GS-OOF-65295, a Federal Supply Schedule contract for the lease of light trucks. The contract provided that each lease would be for twelve months, with an option to extend for two additional twelve month periods. Appeal File, Exhibit 1. 2. Pursuant to the terms of the contract, in order to recover damages to the vehicles an appraisal report must be filled out by the contractor: The Contractor shall be responsible for performing an appraisal of each vehicle prior to its removal from Government custody and shall furnish to the agency/department a copy of each appraisal report. The agencies/departments will assume full responsibility for reconditioning the vehicles, excluding normal wear and tear as defined below, at its expense. The agency/department will not be responsible for damage not listed on the appraisal report. Appeal File, Exhibit 1, Section H, RETURN OF VEHICLES B. (emphasis added). 3. On March 27, 1986, the Navy issued delivery order no. N62467-86-F-4479 for the lease of twenty-five GMC trucks under the contract. The vehicles were used by the Navy for a period of three years, from July 28, 1986 through July 27, 1989. Appeal File, Exhibit 1; Complaint 1 and Respondent's Answer Admitting Averment. 4. At the end of the lease term, the Navy reconditioned the vehicles. On August 2, 1989, the vehicles were jointly inspected by the Government and by Mr. Lawrence Pickett on behalf of Centennial Leasing. Mr. Pickett was paid by Centennial for this work. Transcript at 22. The inspection lasted for approximately three hours. Transcript at 51. Photographs of each vehicle were taken at the time of inspection by Mr. Pickett. Respondent's Exhibit I. 5. At the time of the inspection, Mr. Pickett surmised that the vehicles were in excellent condition. Transcript at 54. In accord with the contract requirements, Mr. Pickett prepared and signed, on the signature line entitled "Contractor's agent," the required appraisal reports. On the face of each of the appraisal reports appeared the following boldface statement: THE SUBJECT VEHICLE DOES NOT HAVE ANY DAMAGES NOR WILL REQUIRE ANY REPAIRS DUE TO ANY CONDITION BEYOND NORMAL USAGE AS OUTLINED IN THE CONTRACT TERMS. The completed reports were countersigned by the Government's agent. Appeal File, Exhibit 2. 6. On August 10, 1989, September 7, 1989, and September 19, 1989, Centennial was notified by the Navy to remove the vehicles from the Government's possession. The vehicles were removed by Centennial between August 28, 1989, and September 25, 1989. Respondent's Exhibit III, V. 7. On October 10, 1989, Centennial submitted a $21,250 claim to the Navy for the Navy's "grossly negligent and unprofessional reconditioning work" which allegedly forced Centennial to sell the vehicles at a "price substantially below the projected wholesale value." Appeal File, Exhibit 5. 8. By letter dated January 8, 1990, the Head of the Contracts Division of the Navy, denied Centennial's claim on the grounds that all of the vehicles had been fully reconditioned pursuant to the contract terms and because Centennial's own agent had fully inspected and accepted, without reservation of right, all of the leased vehicles. Appeal File, Exhibit 3. 9. On June 1, 1990, Centennial submitted a claim for $21,250 in damages to the contracts division, Federal Supply Service of GSA, alleging that the Navy had performed "grossly negligent and unprofessional reconditioning work on the leased vehicles. Appeal File, Exhibit 6. 10. On March 19, 1991, Centennial filed a claim for $21,250 in damages with the GSA contracting officer alleging that the Navy had performed "grossly negligent and unprofessional reconditioning work" on the leased vehicles and that the Navy had breached the contract terms by reconditioning the vehicles without the permission of Centennial beforehand. Appeal File, Exhibit 7. 11. On March 27, 1991, GSA's contracting officer issued a final decision denying Centennial's claim due to lack of supporting documentation. Appeal File, Exhibit 8. On August 9, 1991, Centennial filed a timely appeal with this Board. Discussion An agent has the power to bind his principal only to the extent permitted by the principal. Savoy Construction Co., ENGBCA 4104, 83-2 BCA 16655 (1983). Thus, an agent's power to bind his principal to an agreement reached with a third party turns on the authority the principal has conferred. Id. at 82,817. Agency can be broken down into two classes: actual and apparent, depending on the type of authority the agent has. Id. For our discussion, an explanation of only actual authority is required. Actual agency is bifurcated into two types, express and implied agency. Id. A principal may confer authority on the agent by expressly setting forth precise limits on what the agent may or may not do. Id. Further, agency may be implied from words and conduct of the parties and circumstances of the particular case evidencing an intention to create the relationship. Id. at 82,818. Implied authority is actual authority circumstantially proved, resting ultimately upon the principal's intention and manifested by the facts. Id. Mr. Pickett was paid to inspect these trucks on behalf of Centennial. Finding 4. Therefore, Mr. Pickett was endowed with the express authority to inspect the vehicles on Centennial's behalf as their agent. As part of the inspection, the creation of appraisal reports was required if Centennial was to claim any damages to the vehicles. Finding 2. Considering that Mr. Pickett possessed the express authority to conduct the inspection and the fact that the only way Centennial could claim damages to the vehicles was to have the appraisal reports completed, we conclude that he also had the implied authority to fill out the appraisal reports and place his signature on the report as Centennial's agent. Since Centennial's agent signed an appraisal report for each vehicle, and all reports stated, "THE SUBJECT VEHICLE DOES NOT HAVE ANY DAMAGES NOR WILL REQUIRE ANY REPAIRS DUE TO ANY CONDITION BEYOND NORMAL USAGE AS OUTLINED IN THE CONTRACT TERMS," Centennial is bound by the report and the statements contained within the report. The Government was within its rights to recondition the vehicles prior to inspection and without Centennial's permission, as the contract provides: "The agencies/departments will assume full responsibility for reconditioning the vehicles, . . . at its [sic] expense." Finding 2. There is no requirement in the contract to conduct reconditioning after inspection by the contractor or only with the contractor's permission. The only requirement was that the Government have the vehicles reconditioned. The Government reconditioned the vehicles; Appellant's agent signed off on the reconditioned vehicles as both undamaged and as vehicles that would not require repairs beyond normal wear and tear. The contract states that the Government will not be responsible for damages not listed on the appraisal report. Finding 2. Since the signed appraisal reports state that there are no damages to the vehicles, Centennial cannot now recover for any alleged damages to the vehicles. Decision The appeal is DENIED. ________________________________ ANTHONY S. BORWICK Board Judge We concur: ____________________________ VINCENT A. LaBELLA Acting Chief Board Judge ____________________________ CATHERINE B. HYATT Board Judge