A-15256, AUGUST 25, 1926, 6 COMP. GEN. 158

A-15256: Aug 25, 1926

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ACCEPTANCE OF OTHER THAN LOWEST BID - LIMITATION OF AUTHORITY OF GOVERNMENT CONTRACTING OFFICERS A CONTRACTING OFFICER OF THE GOVERNMENT IS WITHOUT AUTHORITY TO OBLIGATE THE GOVERNMENT TO PAY OTHER THAN THE PRICE STIPULATED IN THE LOWEST BID ON ARTICLES COMPLYING WITH THE SPECIFICATIONS. A HIGHER BIDDER FOR THE FURNISHING OF SUPPLIES TO THE GOVERNMENT IS ON NOTICE THAT THE ACCEPTANCE OF HIS BID BY A GOVERNMENT CONTRACTING OFFICER MAY BE QUESTIONED BY THE ACCOUNTING OFFICERS OF THE GOVERNMENT. FIVE BIDS WERE RECEIVED. THE BID WAS ACCEPTED. CLAIMANT'S BID WAS NOT THE LOWEST OF THE BIDS RECEIVED. SETTLEMENT WAS MADE UPON THE BASIS OF THE LOWEST BID SUBMITTED. E. CONKLIN BRASS AND COPPER COMPANY'S BID IS UNSATISFACTORY.

A-15256, AUGUST 25, 1926, 6 COMP. GEN. 158

ADVERTISING, ACCEPTANCE OF OTHER THAN LOWEST BID - LIMITATION OF AUTHORITY OF GOVERNMENT CONTRACTING OFFICERS A CONTRACTING OFFICER OF THE GOVERNMENT IS WITHOUT AUTHORITY TO OBLIGATE THE GOVERNMENT TO PAY OTHER THAN THE PRICE STIPULATED IN THE LOWEST BID ON ARTICLES COMPLYING WITH THE SPECIFICATIONS, AND HIS ACCEPTANCE OF A HIGHER BID WITHOUT A VALID REASON THEREFOR DOES NOT OBLIGATE THE GOVERNMENT TO PAY A GREATER AMOUNT THAN THAT SPECIFIED IN THE LOWEST BID. A HIGHER BIDDER FOR THE FURNISHING OF SUPPLIES TO THE GOVERNMENT IS ON NOTICE THAT THE ACCEPTANCE OF HIS BID BY A GOVERNMENT CONTRACTING OFFICER MAY BE QUESTIONED BY THE ACCOUNTING OFFICERS OF THE GOVERNMENT.

DECISION BY COMPTROLLER GENERAL MCCARL, AUGUST 25, 1926:

CRANE CO. REQUESTED JUNE 22, 1926, REVIEW OF SETTLEMENT NO. 0120526 C, DATED JUNE 9, 1926, DISALLOWING $5.34 OF ITS CLAIM FOR $459.30 FOR MATERIALS DELIVERED TO THE BUREAU OF MINES, DEPARTMENT OF COMMERCE, UNDER PROPOSAL NO. 423-A AND ACCEPTANCE DATED APRIL 29, 1926.

IT APPEARS THAT THE PURCHASING AGENT OF THE BUREAU OF MINES, DEPARTMENT OF COMMERCE, AT PITTSBURGH, PA., ADVERTISED FOR BIDS ON A QUANTITY OF BRASS TEES, PLUGS, ETC., MORE PARTICULARLY DESCRIBED IN THE REQUEST FOR BIDS AS FOLLOWS:

TWELVE (12) 2 INCH TEES, BRASS, EXTRA HEAVY.

TWELVE (12) 2 INCH PLUGS, BRASS.

SIX (6) 2 INCH BRASS UNIONS, GROUND JOINT.

SIX (6) 2 INCH BRASS ELBOWS, EXTRA HEAVY.

24 LENGTHS.

ONE (1) 2 INCH EXTRA HEAVY BRASS PIPE.

FIVE BIDS WERE RECEIVED. THE CLAIMANT SUBMITTED A BID OF $459.30. THE BID WAS ACCEPTED. CLAIMANT'S BID WAS NOT THE LOWEST OF THE BIDS RECEIVED, BEING $5.34 MORE THAN THAT OF T. E. CONKLIN BRASS AND COPPER CO., THE LOWEST BIDDER. SETTLEMENT WAS MADE UPON THE BASIS OF THE LOWEST BID SUBMITTED, OR $453.96 FOR THE MATERIALS DELIVERED. CLAIMANT REFUSED TO ACCEPT SETTLEMENT ON THIS BASIS AND RETURNED CHECK IN THE SUM OF $453.96 AND CLAIMS PAYMENT OF THE SUM OF $459.30.

WITH REFERENCE TO THE ACCEPTANCE OF OTHER THAN THE LOWEST BID THE ADMINISTRATIVE OFFICER TATES:

T. E. CONKLIN BRASS AND COPPER COMPANY'S BID IS UNSATISFACTORY, OWING TO LIGHT-WEIGHT MATERIAL ON 2ND AND 3RD ITEMS.

IN DECISION OF THIS OFFICE, DATED NOVEMBER 5, 1925, 5 COMP. GEN. 331, IT WAS SAID:

THE PURPOSE OF THE STATUTES REQUIRING COMPETITION IS PRIMARILY TO GIVE THE UNITED STATES THE ADVANTAGE OF THE LOWEST AVAILABLE PRICE FOR THE MATERIAL OR THE SERVICE DESIRED AND PRESUPPOSES THE ACCEPTANCE OF THE LOWEST BID CONFORMING TO THE STIPULATED CONDITIONS. THERE MAY BE REASONS WHY THE LOWEST BID IS NOT DESIRED TO BE ACCEPTED. HOWEVER, A HIGHER BID MAY NOT PROPERLY BE ACCEPTED AND HIGHER COST BE THUS PAID UNLESS THE REASONS FOR THE REJECTION OF A LOWER BID ARE OF SUCH MATERIAL CHARACTER AS TO FULLY WARRANT SUCH ACTION AND SUPPORT THE HIGHER AMOUNT TO BE PAID. COMPETITIVE BIDDERS AS WELL AS THE PUBLIC IN GENERAL ARE CONCERNED IN THE ACCEPTANCE OF THE LOWEST BID, AND IT APPEARS THAT THE REJECTION IS UPON INSUFFICIENT FACTS THERE ARISES A PROPER QUESTION FOR THE CONSIDERATION OF THIS OFFICE OF THE ADMINISTRATIVE ACTION IN ACCEPTING THE HIGHER BID.

THE REASONS ADVANCED BY THE ADMINISTRATIVE OFFICER FOR THE ACCEPTANCE OF OTHER THAN THE LOWEST BID FORM NO LEGAL BASIS FOR THE ACCEPTANCE THEREOF FOR THE REASON THAT IT APPEARS THAT THE MATERIALS OFFERED BY THE LOWER BIDDER FULLY MET THE REQUIREMENTS OF THE SPECIFICATIONS.

THE CONTRACTING OFFICER ACTING FOR AND IN BEHALF OF THE UNITED STATES BEING REQUIRED TO ACCEPT THE BID OF THE LOWEST RESPONSIBLE BIDDER OFFERING SUPPLIES MEETING THE STIPULATED CONDITIONS, IT WOULD NECESSARILY FOLLOW THAT THE ACCEPTANCE OF A BID BY SAID OFFICER PURPORTING TO OBLIGATE THE UNITED STATES FOR THE PAYMENT OF ANY AMOUNT IN EXCESS OF OF THE LOWEST BID WOULD NOT BE AUTHORIZED AS BEING BEYOND THE SCOPE OF HIS AUTHORITY. WHERE AN AGENT OF THE GOVERNMENT ACTS IN EXCESS OF THE AUTHORITY VESTED IN HIM, HIS ACT, FROM A LEGAL STANDPOINT, IS NO LONGER THE ACT OF THE GOVERNMENT. THE UNDERWRITER, 6 FED.REP. (2D EDITION) 937. THE GOVERNMENT'S AGENTS OR OFFICERS HAVE ONLY LIMITED POWER AND CERTAIN PRESCRIBED DISCRETION, AND PERSONS DEALING WITH SUCH AGENTS OR OFFICERS MUST UNDER ALL CIRCUMSTANCES SEE FOR THEMSELVES THAT SUCH AUTHORITY IS NOT EXCEEDED. THE UNAUTHORIZED ACTS OF SUCH AGENTS CAN NOT OBLIGATE THE GOVERNMENT. FILOR V. UNITED STATES, 9 WALL. 45; WHITESIDE V. UNITED STATES, 93 U.S. 247, 256; 5 COMP. GEN. 124. THIS IS PARTICULARLY FOR CONSIDERATION OF A HIGHER BIDDER WHOSE BID IS ATTEMPTED TO BE ACCEPTED, SUCH ACTION IMMEDIATELY PUTTING THE HIGHER BIDDER ON NOTICE THAT IT MAY BE QUESTIONED BY THE ACCOUNTING OFFICERS WHETHER THE REASONS FOR ACCEPTING THE HIGHER BID AS AGAINST A LOWER BID ARE LEGALLY GOOD AND SUFFICIENT.

SINCE THE CONTRACTING OFFICER THIS CASE WAS AUTHORIZED TO OBLIGATE THE GOVERNMENT ONLY TO THE AMOUNT OF THE LOWEST BID, PAYMENT IN EXCESS OF THAT AMOUNT MAY NOT BE MADE UNDER THE APPROPRIATION INVOLVED.

CLERK NO. 185,007 IN THE SUM OF $453.96 IS RETURNED IN FULL SETTLEMENT OF ALL CLAIMS ARISING OUT OF THE TRANSACTION, AND IF NOT ACCEPTED BY CLAIMANT IT MAY BE FORTHWITH RETURNED BY CLAIMANT AND THE AMOUNT THEREOF WILL BE PLACED BACK IN THE TREASURY OF THE UNITED STATES TO THE CREDIT OF THE APPROPRIATION UNDER WHICH DRAWN AND THE CLAIM BE DISALLOWED ACCORDINGLY.