B-165297, DEC. 6, 1968

B-165297, DEC. 6, 1968

TO FRED EGGERS COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTERS OF SEPTEMBER 11, OCTOBER 4 AND OCTOBER 17, 1968, WITH ENCLOSURES, REQUESTING RELIEF IN CONNECTION WITH AN ERROR ALLEGED AFTER AWARD TO HAVE BEEN MADE IN YOUR BID UPON WHICH NAVY CONTRACT NO. 62473-67-C-3040 WAS BASED.

ON MAY 20, 1968, THE SOUTHWEST DIVISION, NAVAL FACILITIES ENGINEERING COMMAND, SAN DIEGO, CALIFORNIA, ISSUED AN INVITATION FOR BIDS FOR FURNISHING OF ALL PLANT, LABOR, EQUIPMENT AND MATERIAL FOR THE CONSTRUCTION OF UTILITIES AT CAMP SAN ONOFRE, INCLUDING ELECTRICAL SYSTEM MODIFICATION AND GAS DISTRIBUTION SYSTEM, AND MISCELLANEOUS RELATED WORK ALL IN ACCORDANCE WITH PLANS AND SPECIFICATIONS. BIDS WERE OPENED ON JUNE 17, 1968, WITH THE FOLLOWING RESULTS:

FRED EGGERS COMPANY $ 79,000

MAECON INC. 92,408

ASSOCIATES PLUMBING CO. 98,889

SWANSON ELECTRIC, INC. 198,156

THE GOVERNMENT ESTIMATE WAS IN THE AMOUNT OF $114,000. IN VIEW OF THE SUBSTANTIAL DIFFERENCE BETWEEN YOUR BID AND THE OTHER THREE BIDS RECEIVED, YOU WERE REQUESTED TO VERIFY YOUR BID IN WRITING BY LETTER DATED JUNE 17, 1968, FROM THE CONTRACTING OFFICER, WHEREIN HE ATTACHED THE ABSTRACT OF BIDS SHOWING THE RANGE OF BIDS AND THE GOVERNMENT ESTIMATE. YOU STATE THAT YOUR BID WAS REVIEWED FROM THE STANDPOINT OF MATERIAL QUANTITIES, AND THE PRICING OF THE MATERIAL AND LABOR. IN PARTICULAR, YOU SECURED WRITTEN VERIFICATION OF A TELEPHONED QUOTATION FROM YOUR PIPE SUPPLIER. ON JUNE 22, 1968, YOU VERIFIED YOUR BID BY TELEGRAM TO THE CONTRACTING OFFICER. AWARD WAS MADE TO YOUR FIRM ON JUNE 26, 1968, NOTICE OF WHICH WAS RECEIVED BY YOU ON JUNE 29, 1968. ON JULY 22, 1968, YOU ADVISED THE PROCUREMENT AGENCY THAT THE QUOTATION RECEIVED FROM THE PIPE SUPPLIER WAS IN ERROR AND THAT, BY REASON THEREOF, YOUR BID PRICE DID NOT REFLECT THE CORRECT COST FOR PIPE. DETAILS OF THE ERROR ARE AS FOLLOWS:

1. COST OF MATERIALS IN ORIGINAL ESTIMATE $27,012

2. REVISED COST OF MATERIALS 38,311

DIFFERENCE $11,299

1 PERCENT BOND 113

$11,412

ORIGINAL BID $79,000

ERROR ADDITION 11,412 ------

REVISED TOTAL $90,412

YOU REPORT THAT YOUR SUPPLIER ADMITS ITS ERROR AND GIVES AS A REASON THE FACT THAT IT DID NOT HAVE THE PROPER MILITARY SPECIFICATION IN ITS OFFICE.

YOU HAVE SUBMITTED COPIES OF QUOTATIONS FROM YOUR PIPE SUPPLIER DATED JUNE 19 AND JULY 17, 1968, WHICH ARE STATED TO BE THE ORIGINAL AND THE REVISED VENDOR'S QUOTATIONS AND COPIES OF YOUR ORIGINAL AND REVISED ESTIMATES (WORKSHEETS). YOU HAVE ALSO FURNISHED A COPY OF VENDOR'S LETTER DATED OCTOBER 15, 1968, IN WHICH THE ERROR CLAIMED IS SHOWN TO HAVE ARISEN SIMPLY FROM THE SUPPLIER'S FAILURE TO QUOTE ON A GRADE OF PIPES, VALVES, AND FITTINGS MEETING THE SPECIFICATIONS. LATER QUOTATIONS ON GRADES OF MATERIAL MEETING THE SPECIFICATIONS ACCOUNT FOR THE HIGHER PRICE SOUGHT.

THE QUESTION PRESENTED IN THIS CASE IS NOT WHETHER A MISTAKE HAS BEEN MADE BUT WHETHER AN AWARD PURSUANT TO THE FACTS AS PRESENTED ABOVE RESULTED IN A VALID AND BINDING CONTRACT. ALLIED CONTRACTORS, INC. V UNITED STATES, 310 F.2D 945. IN REGARD TO SITUATIONS OF THIS NATURE, IT IS WELL ESTABLISHED THAT THE RESPONSIBILITY FOR THE PREPARATION OF BIDS IS ON THE BIDDER WHO IS PRESUMED TO BE QUALIFIED TO ESTIMATE THE PRICES WHICH CAN BE CHARGED IN ORDER FOR A BIDDER TO REALIZE A REASONABLE PROFIT. SEE FRAZIER-DAVIS CONSTRUCTION COMPANY V UNITED STATES, 100 CT. CL. 120, 163. ARMED SERVICES PROCUREMENT REGULATION 2 406.3 (E) (1) PLACES A DUTY ON THE CONTRACTING OFFICER TO VERIFY A BID IF THERE IS AN APPARENT MISTAKE IN THE BID OR IF THE CONTRACTING OFFICER HAS REASON TO BELIEVE THAT A MISTAKE HAS BEEN MADE. ACCEPTANCE OF A BID UNDER THOSE CONDITIONS WITHOUT VERIFICATION WOULD NOT RESULT IN A BINDING CONTRACT. HOWEVER, IF THE BIDDER DOES VERIFY HIS BID, AS HERE, WITH KNOWLEDGE OF THE FACTS WHICH IMPELLED THE CONTRACTING OFFICER TO REQUEST VERIFICATION, AND AWARD IS MADE PURSUANT TO SUCH VERIFICATION, NO PRESUMPTION OF BAD FAITH ON THE PART OF THE CONTRACTING OFFICER ARISES. SEE ALABAMA SHIRT AND TROUSER CO. V UNITED STATES, 121 CT. CL. 313; 27 COMP. GEN. 17. AFTER BEING ADVISED THAT YOUR BID WAS SUBSTANTIALLY LOW, YOU UNEQUIVOCALLY CONFIRMED YOUR BID IN WRITING TO THE CONTRACTING OFFICER. UPON SUCH UNEQUIVOCAL VERIFICATION, THE CONTRACTING OFFICER HAD A DUTY TO MAKE THE AWARD TO THE LOW BIDDER AND AN AWARD MADE ON SUCH BASIS IS FULLY JUSTIFIED. SEE CARNEGIE STEEL CO. V CONNELLY, 89 N.J.L. 1, 97 A.774; SHRIMPTON MFG. CO. V BRIN, 59 TEX. CIV. APP. 352, 125 S.W. 942; AND ALABAMA SHIRT AND TROUSER CO. V UNITED STATES, SUPRA.

SINCE ACCEPTANCE OF YOUR BID CONSTITUTED A VALID AND BINDING CONTRACT, THE GOVERNMENT WAS ENTITLED TO RECEIVE PERFORMANCE STRICTLY IN ACCORDANCE WITH ITS TERMS AND NO OFFICER OF THE GOVERNMENT HAS AUTHORITY TO SURRENDER OR WAIVE THAT RIGHT VESTED IN THE GOVERNMENT WITHOUT ADEQUATE COMPENSATION. SEE SIMPSON V UNITED STATES, 172 U.S. 372; UNITED STATES V AMERICAN SALES CORPORATION, 27 F.2D 389, AFFIRMED 32 F.2D 141, CERTIORARI DENIED, 280 U.S. 574; PACIFIC HARDWARE AND STEEL COMPANY V UNITED STATES, 49 CT. CL. 327, 335; AND BAUSCH AND LOMB OPTICAL COMPANY V UNITED STATES, 78 ID. 584, 607.

IT IS CLEAR FROM THE RECORD THAT THE ERROR IN BID MADE BY YOUR COMPANY IN THIS CASE WAS DUE TO YOUR SUPPLIER'S AND YOUR OWN NEGLIGENCE AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. ANY ERROR THAT MAY HAVE BEEN MADE WAS UNILATERAL -- NOT MUTUAL -- AND, THEREFORE, DOES NOT ENTITLE YOU TO THE RELIEF ASKED FOR. SEE EDWIN DOUGHERTY AND M. H. OGDEN V UNITED STATES, 102 CT. CL. 249; AND SALIGMAN ET AL. V UNITED STATES, 56 F.SUPP. 505. SEE, ALSO, 20 COMP. GEN. 652; 26 ID. 415; B-163082, MAY 3, 1968, 47 COMP. GEN. ---. ..END :