Request for Contract Reformation

A firm requested reformation of a contract for masonry repairs that it performed for the Department of the Army. The amount which should be paid for the removal and replacement of a number of bricks was at issue. The firm argued that it was entitled to reformation because of defective specifications and a mistake in bid. The original contract provided for payment of $7,840 for the work. Later, the contract was modified following a decision by the contracting officer which denied the firm's claim for compensation in the amount of $92,745.87. The modification increased the esimated quantity of brick work and the amount to be paid to $16,537.50. This increase reflected the fact that the firm had installed more bricks than the Government estimate. Since the installed bricks were smaller than the ones specified in the contract, appropriate conversion ratios were used. The firm appealed the contracting officer's decision to the Armed Services Board of Contract Appeals (ASBCA), alleging that the Army's specifications were defective. ASBCA found that the size of the brick was misstated in the specifications and in the scaled drawings and refused to charge the firm with constructive knowledge of the error. ASBCA also found that a series of contractor miscalculations had led it to the mistaken conclusion that the "160" in the price schedule was to be read as square feet rather than cubic feet. ASBCA concluded that the contractor had been fully compensated for all work in excess of the initially estimated quantities and was not entitled to more. The appeal was denied. A claim submitted to the contracting officer under the Contracts Disputes Act of 1978 was not considered on the basis that the Act did not apply to the contract. Subsequently, a claim was filed with GAO. GAO would not consider the claim that the bid specifications were defective since ASBCA had rendered a decision on that claim. GAO will not review ASBCA decisions absent a showing of fraud or bad faith. However, GAO will consider claims of mistake in bid where the contract was entered into before the effective date of the Act, as in this case. GAO found that, when the contracting officer amended the contract after it was performed and the firm was compensated on the basis of the contract unit price, the firm was not entitled to a reformation of its contract. Thus, the claim was denied.