B-123539, MAY 21, 1958

B-123539, MAY 21, 1958

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER DATED APRIL 21, 1958, FROM THE DEPUTY ASSISTANT SECRETARY OF THE ARMY (LOGISTICS), WITH ENCLOSURES, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN WITH RESPECT TO AN ERROR ALLEGED BY THE GROBAN SUPPLY COMPANY TO HAVE BEEN MADE IN ITS BID SUBMITTED PURSUANT TO SPOT BID INVITATION NO. 15-059-S-58-5, ISSUED BY THE U.S. ARMY MEDICAL DEPOT, LOUISVILLE, KENTUCKY. ALSO, OUR OPINION IS REQUESTED CONCERNING A PROPOSED MODIFICATION OF EXISTING PROCEDURES FOR DETERMINING ADMINISTRATIVELY THE ACTION TO BE TAKEN WITH RESPECT TO ERRORS IN BID ALLEGED AFTER ACCEPTANCE BY THE GOVERNMENT.

BY THE REFERRED-TO INVITATION, BIDS WERE REQUESTED--- TO BE OPENED DECEMBER 31, 1957--- FOR THE SALE OF VARIOUS ITEMS OF SUPPLIES AND EQUIPMENT. IN RESPONSE THERETO, THE GROBAN SUPPLY COMPANY SUBMITTED A BID OFFERING TO PURCHASE ITEMS NOS. 55 AND 65 FOR $2.15 AND $1.85 PER UNIT, RESPECTIVELY. THE BID WAS ACCEPTED AS TO ITEM NO. 65 IN THE TOTAL AMOUNT OF $277.50 AND THE COMPANY WAS SO ADVISED BY LETTER OF JANUARY 3, 1958.

AFTER RECEIPT OF THE NOTICE OF AWARD, THE CONTRACTOR, BY LETTER DATED JANUARY 14, 1958, NOTIFIED THE PROPERTY DISPOSAL OFFICER (CONTRACTING OFFICER) THAT IT HAD INTENDED TO BID ON ITEM NOS. 55 AND 61 AND THAT THEIRS IS AN INDUSTRIAL HYDRAULIC BUSINESS HAVING NO USE WHATEVER FOR ITEM NO. 65, DESCRIBED AS CONTACT SPRINGS--- END ITEM RADIOGRAPHIC AND FLUOROSCOPIC UNIT, ETC. UPON BEING ADVISED BY THE CONTRACTING OFFICER THAT ITS BIDS WERE ON ITEMS NOS. 55 AND 65 THE COMPANY, IN A LETTER DATED JANUARY 22, 1958, STATED THAT "* * * OUR BIDDING ON ITEM 65 WAS PURELY AN ERROR IN TRANSCRIPTION AND AS SUCH AN HONEST MISTAKE FOR WHICH WE SHOULD NOT BE HELD LIABLE.' IN SUPPORT OF ITS CONTENTION THE CONTRACTOR HAS FURNISHED COPIES OF PAGES 13 AND 14 OF THE BID INVITATION WITH NOTATIONS ALLEGED TO HAVE BEEN MADE PRIOR TO SUBMITTING THE BIDS AND INDICATING THAT IT INTENDED TO BID ON ITEMS NOS. 55 AND 61.

IN AN UNDATED STATEMENT THE CONTRACTING OFFICER REPORTS THAT---

"5. THE BID OF THE GROBAN SUPPLY CO. WAS ONLY .05 MORE THAN THE AMOUNT OF THE NEXT HIGHEST BID. THE BIDS SUBMITTED BY GROBAN SUPPLY CO. CLEARLY INDICATE THE BIDS WERE FOR ITEMS 55 AND 65. THE FACT THAT THE GROBAN SUPPLY CO. IS IN THE INDUSTRIAL HYDRAULIC BUSINESS DOES NOT APPEAR TO HAVE ANY BEARING ON THE ALLEGED MISTAKE AS THERE IS NOTHING TO INDICATE THAT THEY INTENDED TO BID ON ANYTHING OTHER THAN REPAIR PARTS FOR X-RAY EQUIPMENT. THE BID ON ITEM 55 WAS FOR REPAIR PARTS FOR A RADIOGRAPHIC AND FLUOROSCOPIC UNIT. THE BID ON ITEM 65 WAS ALSO FOR REPAIR PARTS FOR A RADIOGRAPHIC AND FLUOROSCOPIC UNIT, AND ITEM 61, WHICH THE GROBAN SUPPLY CO. ALLEGES THEY INTENDED TO BID ON, WAS FOR A REPAIR PART FOR A TABLE, RADIOGRAPHIC AND FLUOROSCOPIC.'

UNDER THE CIRCUMSTANCES APPEARING, AND SINCE THE ERROR WAS NOT ALLEGED UNTIL AFTER AWARD, THERE IS NOTHING IN THE RECORD TO INDICATE THAT THE ACCEPTANCE OF THE BID WAS MADE IN OTHER THAN GOOD FAITH. SUCH AN ACCEPTANCE OF THE BID CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313; AND AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75.

CLEARLY, THE RESPONSIBILITY FOR THE PREPARATION OF A BID SUBMITTED IN RESPONSE TO THE INVITATION ISSUED IN THE PRESENT CASE WAS UPON THE BIDDER. SEE FRAZIER-DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 C.CLS. 120, 163. IF THE GROBAN SUPPLY COMPANY MADE AN ERROR BY BIDDING ON ITEM NO. 65 INSTEAD OF ITEM NO. 61, SUCH ERROR WAS DUE TO ITS OWN NEGLIGENCE AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. ANY ERROR THAT WAS MADE IN THE BID WAS UNILATERAL--- NOT MUTUAL--- AND, THEREFORE, DOES NOT ENTITLE THE BIDDER TO RELIEF. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249; AND SALIGMAN, ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507.

IN THE CIRCUMSTANCES, WE FIND NO LEGAL BASIS FOR GRANTING THE CONTRACTOR THE RELIEF REQUESTED.

THE LETTER OF APRIL 21, 1958, REFERS TO OUR LETTERS OF JULY 26, 1955, JANUARY 6, 1956, AND DECEMBER 26, 1957, B-123539, WHEREIN WE APPROVED A PROCEDURE, SUBJECT TO CERTAIN CONDITIONS, FOR ADMINISTRATIVE ACTION ON ERRORS IN BID ALLEGED AFTER ACCEPTANCE BY THE GOVERNMENT OF OFFERS IN CASES ARISING OUT OF THE PROCUREMENT OF SUPPLIES AND THE SALE OF PERSONAL PROPERTY. ONE OF THE CONDITIONS APPROVED IN OUR LETTER OF JULY 26, 1955, WAS THAT WHEN A REQUEST FOR REFORMATION OR RESCISSION IS NOT GRANTED THE CASE WILL BE PROCESSED TO OUR OFFICE FOR CONSIDERATION. IT IS YOUR STATED VIEW THAT THE OBJECTIVES OF THE APPROVED PROCEDURE CAN BETTER BE ACHIEVED IF AUTHORITY IS GRANTED TO ADMINISTRATIVELY DENY AS WELL AS ALLOW RELIEF REQUESTED IN THESE MISTAKE IN BID CASES.

AUTHORITY IS HEREBY GRANTED TO MODIFY EXISTING PROCEDURES SO AS TO PROVIDE THAT CONTRACTOR'S REQUESTS FOR RELIEF FROM ERRORS ALLEGED AFTER ACCEPTANCE BY THE GOVERNMENT OF AN OFFER MAY IN APPROPRIATE CASES AND SUBJECT TO THE OTHER APPLICABLE CONDITIONS AND LIMITATIONS SET FORTH IN THE ABOVE REFERRED-TO LETTERS, BE DENIED ADMINISTRATIVELY.