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B-129154, JUL. 12, 1957

B-129154 Jul 12, 1957
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ATOMIC ENERGY COMMISSION: REFERENCE IS MADE TO A LETTER DATED JUNE 12. REQUESTING A DECISION AS TO THE APPROPRIATE ACTION TO BE TAKEN IN VIEW OF ADDITIONAL FACTS FURNISHED WITH HIS LETTER WHICH WERE NOT BEFORE OUR OFFICE WHEN DECISION TO YOU OF SEPTEMBER 26. WAS RENDERED IN REGARD TO ERRORS ALLEGED BY C. TO HAVE BEEN MADE IN ITS BID ON WHICH CONTRACT NO. AT/29-1/- 1503 WAS AWARDED FOR FURNISHING MATERIALS AND LABOR AND PERFORMING THE WORK REQUIRED FOR THE CONSTRUCTION OF 125 GROUP 18. WHEREIN YOU WERE INFORMED THAT NO LEGAL BASIS EXISTED FOR MODIFYING THE PRICE SPECIFIED IN THE CONTRACT. WAS BASED ON THE FACTS BEFORE OUR OFFICE WHICH INDICATED THAT THE ERRORS IN ITS BID WERE NOT ALLEGED BY THE COMPANY UNTIL AFTER AWARD OF THE CONTRACT.

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B-129154, JUL. 12, 1957

TO HONORABLE LEWIS L. STRAUSS, CHAIRMAN, ATOMIC ENERGY COMMISSION:

REFERENCE IS MADE TO A LETTER DATED JUNE 12, 1957, WITH ENCLOSURES, FROM THE DEPUTY GENERAL MANAGER, REQUESTING A DECISION AS TO THE APPROPRIATE ACTION TO BE TAKEN IN VIEW OF ADDITIONAL FACTS FURNISHED WITH HIS LETTER WHICH WERE NOT BEFORE OUR OFFICE WHEN DECISION TO YOU OF SEPTEMBER 26, 1956, B-129154, WAS RENDERED IN REGARD TO ERRORS ALLEGED BY C. H. LEAVELL AND COMPANY, TO HAVE BEEN MADE IN ITS BID ON WHICH CONTRACT NO. AT/29-1/- 1503 WAS AWARDED FOR FURNISHING MATERIALS AND LABOR AND PERFORMING THE WORK REQUIRED FOR THE CONSTRUCTION OF 125 GROUP 18, PHASE "A" HOUSES AT THE ATOMIC ENERGY COMMISSION PROJECT AT LOS ALAMOS, NEW MEXICO.

THE DECISION OF SEPTEMBER 26, 1956, WHEREIN YOU WERE INFORMED THAT NO LEGAL BASIS EXISTED FOR MODIFYING THE PRICE SPECIFIED IN THE CONTRACT, WAS BASED ON THE FACTS BEFORE OUR OFFICE WHICH INDICATED THAT THE ERRORS IN ITS BID WERE NOT ALLEGED BY THE COMPANY UNTIL AFTER AWARD OF THE CONTRACT. IT IS NOW REPORTED, HOWEVER, THAT PRIOR TO AWARD OF THE CONTRACT, MR. C. H. LEAVELL, PRESIDENT OF THE COMPANY VERBALLY ADVISED MR. WILSON, THE AREA MANAGER OF THE LOS ALAMOS AREA OFFICE, THAT ERRORS HAD BEEN MADE IN THE COMPANY'S BID; THAT MR. LEAVELL STATED THAT HE DEFINITELY WANTED THE CONTRACT AWARDED TO THE COMPANY, BUT THAT HE WANTED IT AT THE "CORRECT" PRICE, IF POSSIBLE. ALSO, IT IS REPORTED THAT MR. WILSON ADVISED MR. LEAVELL TO EXECUTE THE CONTRACT AT THE BID PRICE AND THEN SUBMIT PROOF OF THE ALLEGED ERRORS FOR CONSIDERATION BY THE COMMISSION AND THE COMPTROLLER GENERAL OF THE UNITED STATES; AND THAT WHEN MR. WILSON INFORMED MR. LEAVELL THAT HE THOUGHT THAT THE COMPANY HAD NO CHANCE FOR RELIEF BECAUSE THE TYPE OF ERRORS ALLEGED WOULD BE DIFFICULT TO PROVE, MR. LEAVELL REPLIED THAT HE WANTED THE CONTRACT REGARDLESS OF THE OUTCOME OF THE APPEAL. IN A CONFIRMING LETTER OF APRIL 24, 1957, MR. LEAVELL STATED THAT ,THE INTENT OF THIS LETTER IS BY NO MEANS TO REQUEST WITHDRAWAL OF OUR BID * * * IF AWARDED AS BID, THE CONTRACT WILL BE PERFORMED TO THE BEST OF OUR ABILITY UNDER THE CIRCUMSTANCES.' IN HIS LETTER OF MAY 4, 1957, BY WHICH HE TRANSMITTED AN EXECUTED COPY OF THE CONTRACT AND THE REQUIRED BONDS TO THE ADMINISTRATIVE OFFICE, MR. LEAVELL STATED "WE ARE SIGNING THESE CONTRACTS WITH THE UNDERSTANDING THAT IT WILL NOT JEOPARDIZE OUR REQUEST FOR RELIEF SET FORTH IN THE APRIL 24TH LETTER, AND THAT IT IS SUBJECT TO ALL THE CONSIDERATION WHICH YOU CAN GRANT US IN THAT REGARD.'

AFTER ALLEGING ERROR IN ITS BID, THE COMPANY ENTERED INTO A FORMAL CONTRACT WHEREIN IT AGREED TO PERFORM THE WORK FOR THE PRICE SPECIFIED IN ITS BID. THE FORMAL CONTRACT SIGNED BY THE COMPANY IS PRESUMED, IN LAW, TO HAVE EXPRESSED THE FINAL UNDERSTANDING OF THE PARTIES. SEE BRAWLEY V. UNITED STATES, 96 U.S. 168, 173, WHEREIN THE SUPREME COURT OF THE UNITED STATES SAID---

"* * * THE WRITTEN CONTRACT MERGED ALL PREVIOUS NEGOTIATIONS, AND IS PRESUMED, IN LAW, TO EXPRESS THE FINAL UNDERSTANDING OF THE PARTIES. THE CONTRACT DID NOT EXPRESS THE TRUE AGREEMENT, IT WAS THE CLAIMANT'S FOLLY TO HAVE SIGNED IT. * * *"

TO THE SAME EFFECT IS THE CASE OF PARISH ET AL. V. UNITED STATES, 8 WALL. 489, 490, WHEREIN THE SUPREME COURT OF THE UNITED STATES STATED- -

"IF THE CLAIMANTS HAD ANY OBJECTION TO THE PROVISIONS OF THE CONTRACT THEY SIGNED, THEY SHOULD HAVE REFUSED TO MAKE IT. HAVING MADE IT, AND EXECUTED IT, THEIR MOUTHS ARE CLOSED AGAINST ANY DENIAL THAT IT SUPERSEDED ALL PREVIOUS ARRANGEMENTS.'

THE FACTS IN THE PRESENT CASE ARE SOMEWHAT SIMILAR TO THOSE IN THE CASE OF THE MASSMAN CONSTRUCTION COMPANY V. UNITED STATES, 102 C.CLS. 699, (CERTIORARI DENIED 325 U.S. 865) WHEREIN THE PLAINTIFF ALLEGED ERROR IN ITS BID BY REASON OF HAVING FAILED TO INCLUDE ON THE SHEET SUMMARIZING THE VARIOUS ESTIMATE SHEETS, THE CHARGE FOR USE OF CERTAIN EQUIPMENT AMOUNTING TO $88,000 APPEARING ON ONE OF THE ESTIMATE SHEETS. EVEN THOUGH THE MISTAKE WAS DISCOVERED AND BROUGHT TO THE ATTENTION OF THE GOVERNMENT BEFORE AWARD, AND THE CONTRACT EXECUTED UNDER PROTEST, THE COURT DENIED ANY RELIEF, SAYING (P. 717/---

"AT THE TIME THE CONTRACT WAS AWARDED TO THE PLAINTIFF, PURSUANT TO ITS BID, AND AT THE TIME IT SIGNED THE CONTRACT, THE PLAINTIFF WAS NOT MISTAKEN. IT HAD BECOME AWARE OF THE MISTAKE IN ITS BID, AND FACED THE PROBLEM OF WHETHER IT WAS WILLING TO SIGN A CONTRACT FOR THE FIGURE WHICH IT HAD, BY MISTAKE SINCE DISCOVERED, BID. THE GOVERNMENT WAS ALSO AWARE OF THE PLAINTIFF'S CLAIM THAT IT HAD MADE A MISTAKE IN ITS BID. THERE WAS NOT, THEN, AT THE TIME OF SIGNING THE CONTRACT, ANY LACK OF KNOWLEDGE, EITHER MUTUAL OR UNILATERAL, WHICH CAUSED EITHER OF THEM TO MAKE THE CONTRACT WHICH THEY DID MAKE, WHEN IN FACT THEY INTENDED TO MAKE A DIFFERENT CONTRACT. THAT BEING SO, IF WE SHOULD REFORM THE CONTRACT AS THE PLAINTIFF REQUESTS, WE WOULD BE MAKING FOR THE PARTIES THE VERY CONTRACT WHICH ONE OF THEM, THE GOVERNMENT, EXPRESSLY REFUSED TO MAKE AT THAT TIME, THOUGH REQUESTED TO DO SO BY THE PLAINTIFF.'

SEE ALSO BOARD OF TRUSTEES OF NATIONAL TRAINING SCHOOL FOR BOYS. V. O. D. WILSON COMPANY, INC., 133 F.2D 399; 23 COMP. GEN. 596; 25 ID. 536; AND 31 ID. 384. ASIDE FROM THE FOREGOING, WHILE THE EVIDENCE FURNISHED IN THIS CASE MIGHT HAVE BEEN REGARDED AS SHOWING THAT MISTAKES WERE MADE IN THE CONTRACTOR'S BID AND A WITHDRAWAL OF THE BID PERMITTED, THE EVIDENCE IS NOT SUFFICIENT TO PERMIT CORRECTION OF THE ALLEGEDLY ERRONEOUS BID.

ACCORDINGLY, ON THE PRESENT RECORD, THERE APPEARS NO LEGAL BASIS FOR CHANGING THE CONCLUSION HERETOFORE REACHED IN THE DECISION OF SEPTEMBER 26, 1956, AND SUCH DECISION IS HEREBY AFFIRMED.

THE PAPERS, WITH EXCEPTION OF THE STATEMENTS OF MR. WILSON AND MR. KENNETH GILBERT, CONSTRUCTION ENGINEER, ARE RETURNED.

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