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B-168987, APR. 3, 1970

B-168987 Apr 03, 1970
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ON BASIS INSTALLATION WAS NOT INTENDED TO BE INCLUDED IN BID PRICE UNDER ITEM I. IS DISALLOWED SINCE SUCH CONSTRUCTION WOULD BE INCONSISTENT WITH BOTH CONTRACT LANGUAGE AND ACCEPTED MEANING OF TERM "OVERTIME INSTALLATION.". " CONTRACTOR'S CLAIM FOR STRAIGHT TIME INSTALLATION COST ON BASIS INSTALLATION WAS NOT INTENDED TO BE INCLUDED IN BID PRICE UNDER ITEM I. OVERTIME INSTALLATION WAS NOT REQUIRED IN PERFORMANCE. IS DISALLOWED SINCE WRITTEN CONTRACT IS PRESUMED TO EXPRESS INTENTION OF ITS PARTIES. IT WILL BE ENFORCED AS WRITTEN. " FOLLOWED BY UNNUMBERED ITEMS ADDING SEPARATE PRICE FOR "OVERTIME INSTALLATION" WAS SO ERRONEOUS AS TO REQUIRE REFORMATION AND ALLOWANCE OF COST OF STRAIGHT TIME INSTALLATION SINCE OVERTIME WAS NOT REQUIRED IN PERFORMANCE.

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B-168987, APR. 3, 1970

CONTRACTS--INCREASED COSTS--CHARGES NOT AUTHORIZED IN CONTRACT UNDER CONTRACT FOR CHUTES "INSTALLED" IN ITEM I, FOLLOWED BY UNNUMBERED ITEMS ADDING SEPARATE PRICES FOR "OVERTIME INSTALLATION" AND "FREIGHT," CONTRACTOR'S CLAIM FOR STRAIGHT TIME INSTALLATION COST, ON BASIS INSTALLATION WAS NOT INTENDED TO BE INCLUDED IN BID PRICE UNDER ITEM I, IS DISALLOWED SINCE SUCH CONSTRUCTION WOULD BE INCONSISTENT WITH BOTH CONTRACT LANGUAGE AND ACCEPTED MEANING OF TERM "OVERTIME INSTALLATION." ADDITIONALLY, FACT THAT INSTALLER FOUND IT UNNECESSARY TO UTILIZE OVERTIME, AND GOVERNMENT ACTION IN ISSUING PURCHASE ORDER AUTHORIZING PAYMENT AS SEPARATE ITEM FOR OVERTIME "IF REQUIRED," MILITATE AGAINST ANY SUCH INTERPRETATION. CONTRACTS--CONSTRUCTION- INTENTION OF PARTIES-- DISAGREEMENT V. AMBIGUITY UNDER CONTRACT FOR CHUTES "INSTALLED" IN ITEM I, FOLLOWED BY UNNUMBERED ITEMS ADDING SEPARATE PRICE FOR "OVERTIME INSTALLATION," CONTRACTOR'S CLAIM FOR STRAIGHT TIME INSTALLATION COST ON BASIS INSTALLATION WAS NOT INTENDED TO BE INCLUDED IN BID PRICE UNDER ITEM I, AND OVERTIME INSTALLATION WAS NOT REQUIRED IN PERFORMANCE, IS DISALLOWED SINCE WRITTEN CONTRACT IS PRESUMED TO EXPRESS INTENTION OF ITS PARTIES, AND IF CLEAR ON ITS FACE, AS HERE, IT WILL BE ENFORCED AS WRITTEN. MERE DISAGREEMENT RESPECTING CONTRACT'S MEANING DOES NOT CREATE AMBIGUITY UNLESS THERE BE GENUINE UNCERTAINTY OF MEANING. SEE CT. CASES CITED. CONTRACTS--MISTAKES --CONTRACTING OFFICER'S ERROR DETECTION DUTY--NOTICE OF ERROR LACKING ON QUESTION OF WHETHER CONTRACTOR'S OFFER UNDER ITEM I TO SUPPLY CHUTES "INSTALLED," FOLLOWED BY UNNUMBERED ITEMS ADDING SEPARATE PRICE FOR "OVERTIME INSTALLATION" WAS SO ERRONEOUS AS TO REQUIRE REFORMATION AND ALLOWANCE OF COST OF STRAIGHT TIME INSTALLATION SINCE OVERTIME WAS NOT REQUIRED IN PERFORMANCE, NOTHING IN CONTRACTOR'S BID COULD HAVE SERVED TO GIVE CONTRACTING OFFICER EITHER ACTUAL OR CONSTRUCTIVE NOTICE OF MISTAKE. ABSENT SUCH NOTICE, BIDDER ALLEGING MISTAKE AFTER AWARD MUST BEAR CONSEQUENCES OF OWN ERROR. SEE CT. CASES CITED.

TO AMETEK, INC.:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 20, 1970, REQUESTING RECONSIDERATION OF THE DISALLOWANCE OF YOUR CLAIM FOR $1,840, WHICH REPRESENTS THE AMOUNT ALLEGEDLY DUE YOU FOR SERVICES PERFORMED UNDER CONTRACT NO. V580P-1471 INVOLVING THE SUPPLY AND INSTALLATION OF FIVE SETS OF LOADING HOPPERS FOR THE VA HOSPITAL, HOUSTON, TEXAS.

THE CONTRACT IN A GROSS AMOUNT OF $20,260 WAS ENTERED INTO DECEMBER 11, 1967, AND WAS MADE UP OF THREE AMOUNTS, AS FOLLOWS:

"1. EASTERN CYCLONE LOADING HOPPER CHUTES CONSTRUCTED OF STAINLESS STEEL, INSTALLED, IN ACCORDANCE WITH SPECIFICATIONS AND DRAWING ATTACHED FOR USE IN CONJUNCTION WITH TROY WASHER EXTRACTORS PURCHASED BY THE VA MARKETING CENTER AT HINES, ILLINOIS, ON PURCHASE ORDER 67-MC 30162 DATED 4 -19-67.

5 EA. $3,198.00 $15,990.00" FOLLOWING THIS NUMBERED ITEM WERE TWO ADDITIONAL UNNUMBERED ITEMS AS FOLLOWS:

"OVERTIME INSTALLATION ADD $696.00 $3,480.00

"FREIGHT ADD $158.00 $ 790.00"

PURCHASE ORDER NO. 4021 WAS ISSUED DECEMBER 11, 1967, AUTHORIZING DELIVERY AND INSTALLATION OF THE LAUNDRY CHUTES AT A COST OF $16,780, WITH A SEPARATE ITEM "OVERTIME FOR INSTALLATION, IF REQUIRED NOT TO EXCEED * * * $3,480."

UPON COMPLETION OF THE CONTRACT WORK, YOU PRESENTED AN INVOICE (N 3033) DATED FEBRUARY 22, 1968, TO THE VETERANS ADMINISTRATION IN THE AMOUNT OF $20,260, WHICH INCLUDED OVERTIME INSTALLATION OF $3,480. SINCE THERE WAS NO RECORD THAT OVERTIME WAS REQUIRED FOR PERFORMANCE OF THE CONTRACT, SETTLEMENT CERTIFICATE NO. 580/14103 DATED SEPTEMBER 12, 1968, DISALLOWED $3,480. THUS, A TOTAL OF $3,535.28 ($3,480 PLUS $55.28 CREDIT ON CREDIT MEMOS N53453 AND N53455) WAS DEDUCTED FROM YOUR INVOICE, AND YOU WERE PAID ON SEPTEMBER 17, 1968, BY CHECK NO. 68393003 IN THE AMOUNT OF $16,724.72.

UPON RECEIPT OF NOTIFICATION THAT OVERTIME WAS NOT REQUIRED IN PERFORMANCE OF THE CONTRACT, YOU ISSUED A CREDIT MEMO (N54522) DATED SEPTEMBER 30, 1968, FOR $1,640 REPRESENTING THE DIFFERENCE BETWEEN OVERTIME AND STRAIGHT TIME INSTALLATION RATES, THUS REDUCING THE AMOUNT CLAIMED FROM $3,480 TO $1,840, WHICH APPEARS TO BE THE AMOUNT NOW CLAIMED. BASICALLY, IT IS YOUR POSITION THAT THE SOLICITATION ORIGINALLY REQUIRED INSTALLATION ON AN OVERTIME BASIS; THAT YOUR BID PRICE OF $15,990 ON ITEM I OF THE CONTRACT THEREFORE DID NOT INCLUDE ANY INSTALLATION CHARGES; THAT INSTALLATION ON A STRAIGHT TIME BASIS WAS AUTHORIZED DURING PERFORMANCE OF THE WORK; AND THAT THE CONTRACT SHOULD THEREFORE HAVE BEEN MODIFIED TO REFLECT YOUR STRAIGHT TIME INSTALLATION COST OF $1,840 IN LIEU OF YOUR OVERTIME BID PRICE OF $3,480. YOU SUBSTANTIATE THIS CONTENTION WITH QUOTATIONS FROM YOUR INSTALLER, EASTERN CYCLONE INDUSTRIES, WHICH SHOW SUCH DIFFERENCE IN INSTALLATION COST BETWEEN STRAIGHT TIME AND OVERTIME.

WITH RESPECT TO YOUR POSITION THAT THE SOLICITATION REQUIRED INSTALLATION ON AN OVERTIME BASIS, ITEM I CALLED FOR HOPPER CHUTES TO BE "INSTALLED" IN ACCORDANCE WITH THE SPECIFICATIONS AND DRAWINGS. YOU WERE ASKED TO QUOTE A PRICE ON THAT BASIS, AND THE PRICE YOU QUOTED WAS $15,990 FOR FIVE UNITS. WHILE PARAGRAPH 6 OF THE SPECIFICATIONS CALLED FOR "ALL WORK TO BE PERFORMED WITH AS LITTLE INTERFERENCE WITH THE OPERATION OF THE LAUNDRY AS POSSIBLE", AND STATED THAT "WORK SHALL BE STARTED AFTER CLOSE OF BUSINESS ON A FRIDAY AND PURSUED TO BE COMPLETED TO THE GREATEST POSSIBLE EXTENT BEFORE BEGINNING OF BUSINESS ON MONDAY", IT IS OUR OPINION THAT ANY CONSTRUCTION OF THIS LANGUAGE WHICH WOULD REQUIRE MANDATORY INSTALLATION ON AN OVERTIME BASIS WOULD BE COMPLETELY INCONSISTENT WITH BOTH THE LANGUAGE OF ITEM I AND THE ACCEPTED MEANING OF THE TERM "OVERTIME INSTALLATION." IN THIS CONNECTION, WORK ON AN OVERTIME BASIS GENERALLY IS NOT REQUIRED UNTIL AFTER 40 HOURS ARE WORKED IN A NORMAL WEEK, OR 8 HOURS ARE WORKED IN A DAY. SEE SECTION 102 (A) OF THE CONTRACT WORK HOURS STANDARDS ACT, 76 STAT. 357, 40 U.S.C. 328 (A).

BOTH THE GOVERNMENT'S ACTION IN ISSUING A PURCHASE ORDER WHICH AUTHORIZED PAYMENT AS A SEPARATE ITEM NOT TO EXCEED $3,480 FOR OVERTIME INSTALLATION "IF REQUIRED", AND THE FACT THAT YOUR INSTALLER FOUND IT UNNECESSARY TO INSTALL ON AN OVERTIME BASIS, SUPPORT THE CONCLUSION THAT INSTALLATION ON AN OVERTIME BASIS WAS NOT INTENDED TO BE A REQUIRED CONDITION OF PERFORMANCE UNDER THE CONTRACT.

IT IS SETTLED THAT A WRITTEN CONTRACT IS PRESUMED TO EXPRESS THE INTENTION OF THE PARTIES TO IT, AND IF IT IS CLEAR ON ITS FACE, IT WILL BE ENFORCED AS WRITTEN. BRAWLEY V. UNITED STATES, 96 U.S. 168 (1877). WHILE THIS PRESUMPTION MAY BE REBUTTED BY A SHOWING THAT THE CONTRACT AS WRITTEN DID NOT EXPRESS THE TRUE INTENTION OF THE PARTIES, MACDOUGALD CONSTRUCTION CO. V. UNITED STATES, 122 CT. CL. 210 (1952), A MERE DISAGREEMENT IN REGARD TO THE MEANING OF A CONTRACT IS NOT NECESSARILY INDICATIVE OF THE PRESENCE OF AN AMBIGUITY, FOR THERE MUST BE GENUINE UNCERTAINTY OF MEANING. CARTER OIL CO. V. MCCASLAND, 190 F. 2D 887 (1951). IN VIEW OF THE FOREGOING, WE ARE UNABLE TO AGREE WITH YOUR CONTENTION THAT THE SOLICITATION WAS ORIGINALLY INTENDED TO REQUIRE INSTALLATION ON AN OVERTIME BASIS, OR THAT THE SUBSEQUENT INSTALLATION ON A STRAIGHT TIME BASIS REQUIRED THE ADDITION OF STRAIGHT TIME INSTALLATION COST TO YOUR BID PRICE FOR ITEM I.

THERE REMAINS FOR CONSIDERATION THE QUESTION OF WHETHER, UNDER A PROPER CONSTRUCTION OF THE SOLICITATION AS SET OUT ABOVE, YOUR OFFER WAS SO ERRONEOUS AS TO REQUIRE OR JUSTIFY REFORMATION OF THE RESULTING CONTRACT. IN PASSING UPON CLAIMS OF THIS NATURE OUR DECISIONS ARE BASED UPON JUDICIAL PRECEDENT, AND IT IS THE GENERAL RULE THAT, WHEN A BIDDER DOES NOT ALLEGE ERROR IN HIS BID UNTIL AFTER HE HAS BEEN AWARDED A CONTRACT, THE BIDDER MUST BEAR THE CONSEQUENCES OF THE MISTAKE UNLESS THE CONTRACTING OFFICER KNEW OR SHOULD HAVE KNOWN OF THE EXISTENCE OF THE MISTAKE AT THE TIME THE BID WAS ACCEPTED. UNITED STATES V. SABIN METAL CORPORATION, 151 F. SUPP. 683 (1957). THUS ACCEPTANCE OF A BID BY A CONTRACTING OFFICER WHO HAS EITHER ACTUAL OR CONSTRUCTIVE KNOWLEDGE OF AN ERROR DOES NOT GIVE RISE TO A VALID AND BINDING CONTRACT. KEMP V. UNITED STATES, 38 F. SUPP. 568 (1941). IN CASES IN WHICH A CONTRACTING OFFICER HAS ACCEPTED A BID WHILE ON NOTICE, EITHER ACTUAL OR CONSTRUCTIVE, OF THE POSSIBILITY OF ERROR IN A BID, IT IS PRESUMED THAT THE CONTRACTING OFFICER EXERCISED BAD FAITH OR ATTEMPTED TO TAKE ADVANTAGE OF THE BIDDER. COMP. GEN. 17 (1947). IN THE INSTANT CASE, THERE WAS NOTHING IN YOUR BID WHICH COULD HAVE GIVEN THE CONTRACTING OFFICER EITHER ACTUAL OR CONSTRUCTIVE NOTICE OF A MISTAKE. FURTHER, THERE WERE NO OTHER BIDS WITH WHICH TO COMPARE YOUR BID PRICE, NOR IS THERE ANY INDICATION THAT THE CONTRACTING OFFICER HAD KNOWLEDGE OF, OR ACCESS TO, THE PRICING ON OTHER COMPARABLE PURCHASES OR INSTALLATION COSTS.

IN VIEW OF THE FOREGOING, THERE WOULD APPEAR TO NO VALID BASIS FOR PAYMENT OF ANY AMOUNT IN EXCESS OF THE $16,780 ALREADY PAID UNDER YOUR CONTRACT. ACCORDINGLY, YOUR CLAIM FOR AN ADDITIONAL $1,840 MUST BE DENIED.

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