B-128456, JUL. 30, 1956

B-128456, JUL. 30, 1956

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED JUNE 26, 1956, FROM THE ASSISTANT SECRETARY (LOGISTICS), WITH ENCLOSURES, RELATIVE TO AN ERROR ALLEGED BY GLAZER STEEL CORPORATION, KNOXVILLE, TENNESSEE, TO HAVE BEEN MADE IN ITS BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. ENG-47-013-54-28, ISSUED ON APRIL 26, 1954, BY THE CORPS OF ENGINEERS, MILWAUKEE DISTRICT, FOR FURNISHING, FABRICATING AND DELIVERING STRUCTURAL STEEL OVERHEAD PIPE SUPPORTS FOR BADGER ORDNANCE WORKS, BARABOO, WISCONSIN. THE BID, IN THE AMOUNT OF $219,984, WAS ACCEPTED AND BECAME THE BASIS OF CONTRACT NO. DA- 47-013-ENG-440, DATED MAY 22, 1954. OUR DECISION IS REQUESTED AS TO WHETHER THE CONTRACTOR MAY BE PAID AN AMOUNT IN ADDITION TO THE CONTRACT PRICE.

IT IS REPORTED THAT DELIVERIES UNDER THE CONTRACT WERE COMPLETED ON OR ABOUT SEPTEMBER 1, 1954, AND THAT FINAL PAYMENT WAS MADE ON A VOUCHER DATED OCTOBER 15, 1954 (EXCEPT FOR PAYMENT OF $100 ADDITIONAL PROVIDED FOR IN CHANGE ORDER NO. 1 DATED OCTOBER 25, 1954, WHICH HAS NOT BEEN PAID). BY LETTER DATED JANUARY 22, 1955, ENCLOSING AN AFFIDAVIT DATED NOVEMBER 1, 1954, THE CONTRACTOR ALLEGED AN ERROR IN ITS BID IN THAT IT HAD UNDERESTIMATED THE STEEL FABRICATING REQUIREMENT BY 120.43 TONS, AND REQUESTED AN ADDITIONAL PAYMENT OF $51,468.42, COMPUTED ON THE BASIS OF ITS ALLEGED ACTUAL LOSS. BY LETTER DATED JUNE 13, 1955, ENCLOSING AN AMENDED AFFIDAVIT NOTARIZED JUNE 14, 1955, THE CONTRACTOR ALLEGED THAT IT HAD FURNISHED 898.94 TONS OF STEEL INSTEAD OF 683.86 TONS AS ESTIMATED BY IT--- AN UNDERESTIMATION OF 215.08 TONS--- AND REQUESTED AN ADDITIONAL PAYMENT OF $69,187.02 COMPUTED AT A PRICE OF $321.68 PER TON, WHICH WAS THE AVERAGE UNIT PRICE REPRESENTED BY ITS BID ON THE BASIS OF ITS ESTIMATED QUANTITY. WITH ITS LETTER WERE ENCLOSED 16 ORIGINAL TAKE OFF SHEETS SHOWING ITS ESTIMATE OF 683.86 TONS AND A LIST OF MATERIALS FURNISHED SHOWING 898.94 TONS SHIPPED.

THE OTHER BIDS RECEIVED WERE IN THE AMOUNTS OF $202,091, $242,187, $253,450, $284,430, $323,890, AND $564,577. THE LOW BID WAS REJECTED ON THE GROUND THAT THE BIDDER WAS NOT RESPONSIBLE, AND THE BID OF GLAZER STEEL CORPORATION IN THE AMOUNT OF $219,984 WAS ACCEPTED AS THE LOWEST AVAILABLE BID. IT THUS APPEARS THAT THE DISPARITY BETWEEN THE GLAZER STEEL CORPORATION BID AND OTHE OTHER BIDS WAS NOT SUCH AS TO PLACE THE CONTRACTING OFFICER ON NOTICE OF POSSIBLE ERROR.

THE FILE SHOWS THAT THE CONTRACT PRICE IS ABOVE THE GOVERNMENT'S ESTIMATE ($194,560) AND THAT THE GOVERNMENT ESTIMATED THAT 895 TONS OF FABRICATING STEEL WOULD BE REQUIRED FOR THE PROJECT, AT $210 AND $220 PER TON FOR DIFFERENT TYPES OF STEEL. IT IS STATED IN THE CONTRACTING OFFICER'S FINDINGS OF FACT THAT THE NEXT-LOW BIDDER HAS STATED THAT ITS BID WAS BASED ON AN ESTIMATE OF 935 TONS OF STEEL, INDICATING AN AVERAGE PRICE OF APPROXIMATELY $260 PER TON. IT IS STATED FURTHER THAT "RELATIVE TO THE DESIGN DRAWINGS, THEY ARE TYPICAL, USUAL AND CUSTOMARY DRAWINGS FURNISHED WITH INVITATIONS TO BID FOR WORK OF THIS CHARACTER," AND THE CONTRACTING OFFICER'S OPINION IS EXPRESSED THAT "THE DRAWINGS ARE ADEQUATE AND COMPLETELY SUFFICIENT FOR PROPERLY ESTIMATING THE QUANTITY OF STEEL REQUIRED TO BE FABRICATED AND DELIVERED UNDER SUBJECT CONTRACT.' THE CONTRACTING OFFICER STATES, ALSO, THAT NO OTHER BIDDER OFFERED ANY OBJECTION OR RAISED ANY QUESTION RELATIVE TO THE SPECIFICATIONS OR DRAWINGS OR ALLEGED ANY ERROR IN ITS BID.

THE FILE DOES NOT INCLUDE ANY EXPLANATION AS TO HOW THE ALLEGED ERROR WAS MADE OR WHEN IT WAS DISCOVERED EXCEPT THAT IN ITS LETTER OF JULY 19, 1955, THE CONTRACTOR STATES THAT THE ERROR WAS DISCOVERED AFTER AWARD OF THE CONTRACT. IN A LETTER DATED DECEMBER 30, 1955, PHOTOSTATIC COPY OF WHICH WAS FURNISHED BY THE CONTRACTOR, MR. SAM GOOD, A REGISTERED ENGINEER IN THE STATE OF TENNESSEE, STATES IN SUBSTANCE THAT THE CONTRACTOR'S ESTIMATORS OMITTED APPROXIMATELY 210 TONS OF STEEL, CONSISTING OF 135 TONS OF BOX TRUSSES AND PIPE ENCLOSURE STEEL AND 75 TONS OF GUSSET PLATES.

IT IS STATED FURTHER IN THE FINDINGS OF FACT THAT ALTHOUGH THE CONTRACTOR'S CLAIM IS COMPUTED ON THE BASIS OF $321.68 PER TON, THE GOVERNMENT ESTIMATED THE COST AT APPROXIMATELY $220 PER TON DELIVERED; AND ATTENTION IS INVITED TO THE FACT THAT AN ADDITIONAL PAYMENT OF $69,187.02 AS CLAIMED BY THE CONTRACTOR WOULD CAUSE THE TOTAL PAYMENT UNDER THE CONTRACT TO EXCEED THE NEXT LOWEST BID BY $46,984.02.

IN 20 COMP. GEN. 652 IT IS STATED:

"THE ESTABLISHED RULE IS THAT WHERE A BIDDER HAS MADE A MISTAKE IN THE SUBMISSION OF A BID AND THE BID HAS BEEN ACCEPTED, HE MUST BEAR THE CONSEQUENCES THEREOF UNLESS THE MISTAKE WAS MUTUAL OR THE ERROR WAS SO APPARENT THAT IT MUST BE PRESUMED THE CONTRACTING OFFICER KNEW OF THE MISTAKE AND SOUGHT TO TAKE ADVANTAGE THEREOF. 26 COMP. DEC. 286; 6 COMP. GEN. 526; 8 ID. 362.'

IN THE INSTANT MATTER NO SATISFACTORY EVIDENCE HAS BEEN FURNISHED THAT THERE WAS AN ERROR IN THE BID OF GLAZER STEEL CORPORATION OF A KIND FOR WHICH RELIEF MAY BE AUTHORIZED. THE BID AS MADE WAS EXACTLY AS IT WAS INTENDED TO BE; ALTHOUGH IT MAY HAVE BEEN BASED ON AN ERRONEOUS COMPUTATION, THE ERROR WAS NOT MUTUAL AND IT WAS NOT SO APPARENT AS TO PLACE THE CONTRACTING OFFICER ON NOTICE OF THE POSSIBILITY OF ERROR; NEITHER WAS IT INDUCED OR CONTRIBUTED TO IN ANY MANNER BY THE GOVERNMENT. ACCORDINGLY, THE ESTABLISHED RULE ABOVE QUOTED IS FOR APPLICATION HERE. THE ACCEPTANCE OF THE CONTRACTOR'S BID UNDER THE CIRCUMSTANCES 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, AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75.

FOR THE REASONS ABOVE SET FORTH, THERE IS NO VALID BASIS FOR PAYMENT TO THE CONTRACTOR OF ANY AMOUNT IN ADDITION TO THE PRICE SPECIFIED IN THE CONTRACT AS MODIFIED BY CHANGE ORDER NO. 1.