B-170134, DEC. 2, 1970

B-170134, DEC. 2, 1970

CONTRACTS - MISTAKE IN BID - UPWARD PRICE ADJUSTMENT REAFFIRMING PREVIOUS DECISION DENYING RELIEF FOR AN UPWARD PRICE ADJUSTMENT RELATIVE TO A CONTRACT WITH VETERANS ADMINISTRATION HOSPITAL, ANN ARBOR, MICHIGAN WHERE NEITHER ACTUAL NOR CONSTRUCTIVE KNOWLEDGE OF A MISTAKE IN THE BID OF DAHLMANN CAN BE CHARGED, THE CONTENTION THAT THE CONTRACTING OFFICER ACTED IN AN UNCONSCIONABLE MANNER IS WITHOUT MERIT.

TO DAHLMANN BUILDING COMPANY, INC.:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 1, 1970, REQUESTING RECONSIDERATION OF OUR DECISION B-170134, AUGUST 11, 1970, DENYING RELIEF FOR AN UPWARD PRICE ADJUSTMENT RELATIVE TO CONTRACT NO. V5237C 193-70 WITH THE VETERANS ADMINISTRATION HOSPITAL, ANN ARBOR, MICHIGAN.

OUR DECISION HELD THAT AT THE TIME OF THE CONTRACT AWARD THE CONTRACTING OFFICER HAD NO ACTUAL KNOWLEDGE OF A MISTAKE IN YOUR BID, NOR COULD HE BE CHARGED WITH CONSTRUCTIVE NOTICE OF A MISTAKE. IN THE CASE UPON WHICH YOU BASE YOUR REQUEST FOR RECONSIDERATION, GEREMIA V BOYARSKY, 107 CONN. 387, 140 A. 749 (1928), THE PLAINTIFF, BEFORE THE CONTRACT WAS EXECUTED, HAD GOOD REASON TO KNOW AND BELIEVE THAT A UNILATERAL ERROR HAD BEEN COMMITTED AND, CONSEQUENTLY, ACTED IN AN UNCONSCIONABLE MANNER IN TAKING UNFAIR ADVANTAGE OF THE MISTAKE IN INSISTING UPON PERFORMANCE AT THE MISTAKEN PRICE. WITHOUT SUCH KNOWLEDGE BEING ATTRIBUTABLE TO THE CONTRACTING OFFICER HERE, IT CANNOT BE ARGUED THAT YOU WERE TREATED IN AN UNCONSCIONABLE MANNER. HENCE, THE CITED CASE IS DISTINGUISHABLE ON THE FACTS.

YOU NEXT ALLEGE THAT THE SOLE REASON FOR PERFORMANCE OF THE CONTRACT WAS THAT "THE CONTRACTING OFFICER INDICATED TO THE CONTRACTOR THAT THE REQUEST FOR RELIEF WOULD IN ALL PROBABILITY BE APPROVED." ASSUMING THIS TO BE THE CASE, OUR OFFICE AND THE COURTS HAVE OFTEN STATED THAT AGENTS OF THE GOVERNMENT MUST HAVE ACTUAL AUTHORITY TO BIND THE UNITED STATES, AND INDIVIDUALS ENTERING INTO CONTRACTUAL ARRANGEMENTS WITH THE UNITED STATES ARE, AS A MATTER OF PUBLIC POLICY, CHARGED WITH THE RESPONSIBILITY OF ACCURATELY ASCERTAINING THE EXTENT OF THE AUTHORITY OF THE AGENT TO ACT FOR THE GOVERNMENT. SEE B-164087, JULY 1, 1968, AND B-168300, DECEMBER 4, 1969, AND CASES CITED THEREIN. UNDER SECTION 1-2.406-4(I) OF THE FEDERAL PROCUREMENT REGULATIONS, AN UPWARD PRICE ADJUSTMENT IN EXCESS OF $1,000 MAY BE GRANTED ONLY BY THE GENERAL ACCOUNTING OFFICE AND NOT BY CONTRACTING AGENCIES. IN VIEW OF THE FOREGOING, OUR DECISION OF AUGUST 11, 1970, MUST BE AFFIRMED.

AS TO YOUR REQUEST FOR A JUDICIAL REVIEW OF OUR DECISION, YOUR ATTENTION IS INVITED TO 23 U.S.C. 1346 AND 1491.