A-17280, APRIL 6, 1927, 6 COMP. GEN. 655

A-17280: Apr 6, 1927

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CONTRACTS - MISTAKE IN BID WHERE THE EVIDENCE SHOWS THAT AT THE TIME OF OPENING OF BIDS FOR THE FURNISHING OF SUPPLIES TO A VETERANS' BUREAU HOSPITAL THE CONTRACTING OFFICER WAS PUT UPON NOTICE THAT THE LOWEST BID FOR 1. WAS A MISTAKE. THE LOWEST BIDDER WAS NOT PERMITTED TO WITHDRAW HIS BID. THE FACTS OF RECORD BEFORE THIS OFFICE AT THE TIME OF THE SETTLEMENT APPEAR TO BE AS FOLLOWS: BY CIRCULAR PROPOSAL (FORM 1211) CLAIMANT AND SEVERAL OTHER DEALERS WERE EACH INVITED BY THE MEDICAL OFFICER IN CHARGE OF SAID HOSPITAL TO SUBMIT ON OR BEFORE MARCH 31. INCLUDED IN THE LIST WAS AN ITEM FOR 1. WAS ACCEPTED APRIL 1. ORDER FOR THE ITEMS IN ACCORDANCE WITH CLAIMANT'S BID PRICES WAS ISSUED TO CLAIMANT UNDER DATE OF APRIL 5.

A-17280, APRIL 6, 1927, 6 COMP. GEN. 655

CONTRACTS - MISTAKE IN BID WHERE THE EVIDENCE SHOWS THAT AT THE TIME OF OPENING OF BIDS FOR THE FURNISHING OF SUPPLIES TO A VETERANS' BUREAU HOSPITAL THE CONTRACTING OFFICER WAS PUT UPON NOTICE THAT THE LOWEST BID FOR 1,500 POUNDS OF COCOANUT, BEING AT THE UNIT PRICE OF $0.0235, AGGREGATE PRICE $35.25, WAS A MISTAKE, AND THE UNIT PRICE OF OTHER BIDDERS RANGED FROM $0.20 3/4 TO $0.22, AND THE LOWEST BIDDER WAS NOT PERMITTED TO WITHDRAW HIS BID, BUT AFTER ACCEPTANCE UNDERTOOK TO FURNISH THE COCOANUT AT THE BID PRICE WITH AN UNDERSTANDING THAT FOLLOWING DELIVERY ADJUSTMENT OF THE MATTER WOULD BE MADE, A CLAIM FOR AN AMOUNT REPRESENTING THE DIFFERENCE BETWEEN THE BID PRICE AS PAID AND $0.20 PER POUND MAY BE ALLOWED AS FAIR AND REASONABLE.

DECISION BY COMPTROLLER GENERAL MCCARL, APRIL 6, 1927:

CAPITAL GRAIN AND FEED CO. REQUESTED DECEMBER 10, 1926, REVIEW OF SETTLEMENT NO. 0133995, DATED SEPTEMBER 4, 1926, DISALLOWING ITS CLAIM FOR $262.10, REPRESENTING THE DIFFERENCE BETWEEN BILLED PRICE AND BID PRICE ON 1,500 POUNDS OF COCOANUT FOR UNITED STATES VETERANS' HOSPITAL, TUSKEGEE, ALA.

THE FACTS OF RECORD BEFORE THIS OFFICE AT THE TIME OF THE SETTLEMENT APPEAR TO BE AS FOLLOWS:

BY CIRCULAR PROPOSAL (FORM 1211) CLAIMANT AND SEVERAL OTHER DEALERS WERE EACH INVITED BY THE MEDICAL OFFICER IN CHARGE OF SAID HOSPITAL TO SUBMIT ON OR BEFORE MARCH 31, 1926, 2 P.M., WHEN BIDS WOULD BE OPENED, A PROPOSAL FOR FURNISHING AND DELIVERING F.O.B. CHEHAW OR TUSKEGEE, ALA., SUPPLIES LISTED THEREIN. INCLUDED IN THE LIST WAS AN ITEM FOR 1,500 POUNDS "COCOANUT, 25 LB.CONT. BAKERS OR EQUAL, SPECIFY BRAND -- ---.' ON THIS ITEM CLAIMANT QUOTED A UNIT PRICE OF $0.0235, AGGREGATE PRICE OF $35.25. THE UNIT PRICE BID ON THIS ITEM BY OTHER DEALERS, SIX IN ALL, RANGED FROM $0.20 3/4 TO $0.22. CLAIMANT'S PROPOSAL COVERING TWO ITEMS, ONE FOR THE COCOANUT AND THE OTHER FOR 33,000 POUNDS FLOUR, HUNTER FLYER, AT $0.0480 PER POUNDS, AGGREGATE FOR FLOUR $1,584, WITH 1 PERCENT DISCOUNT FOR PAYMENT WITHIN 10 DAYS, WAS ACCEPTED APRIL 1, 1926, AND ORDER FOR THE ITEMS IN ACCORDANCE WITH CLAIMANT'S BID PRICES WAS ISSUED TO CLAIMANT UNDER DATE OF APRIL 5, 1926.

VOUCHER COVERING DELIVERY OF THE TWO ITEMS MAY 21, 1926, WAS PREPARED, WHEREIN THE UNIT PRICE OF THE COCOANUT WAS GIVEN AS 20 CENTS, TOTAL FOR COCOANUT $300, THE TOTAL OF THE TWO ITEMS FOR COCOANUT AND FLOUR AMOUNTING TO $1,885.25 LESS 1 PERCENT DISCOUNT ($18.85), MAKING THE NET TOTAL $1,866.40. CLAIMANT WAS ADVISED BY THE MEDICAL OFFICER IN CHARGE UNDER DATE OF MAY 29, 1926:

IN THE AUDIT OF YOUR ACCOUNT FOR GROCERIES FURNISHED THIS STATION MAY 21, 1926, IT HAS BEEN FOUND NECESSARY TO MAKE DEDUCTIONS AGGREGATING $262.10. THE ACCOUNT HAS ACCORDINGLY BEEN APPROVED FOR $1,604.30.

YOUR BID SPECIFIES A QUOTATION OF .0235 ON THE ITEM OF COCOANUT, WHILE YOU HAVE BILLED THIS ITEM AT 20 CENTS PER POUND, TAKING INTO CONSIDERATION THE DISCOUNT OF 1 PERCENT THE AGGREGATE DEDUCTION IS $262.10.

RECLAIM MAY BE MADE FOR THIS AMOUNT THROUGH THE MEDICAL OFFICER IN CHARGE, U.S. VETERANS' HOSPITAL, TUSKEGEE, ALABAMA, FURNISHING THE ORIGINAL OF THIS LETTER.

PAYMENT IN THE AMOUNT OF $1,604.30 WAS MADE ON THE VOUCHER MAY 31, 1926, BY THE DISBURSING CLERK. BASED ON BILL RENDERED UNDER DATE OF MAY 31, 1926, FOR THE DIFFERENCE, WHEREIN CLAIMANT STATES THAT IN ITS PROPOSAL ITS QUOTED UNIT PRICE OF $0.0235, AND AGGREGATE PRICE $35.25, FOR THE 1,500 POUNDS OF COCOANUT WAS IN ERROR AND SHOULD HAVE READ UNIT PRICE $0.20, AGGREGATE PRICE $300, RECLAIM VOUCHER IN THE AMOUNT OF $262.10 WAS PREPARED AND WAS REFERRED TO THIS OFFICE BY THE ASSISTANT DIRECTOR OF THE UNITED STATES VETERANS' BUREAU FOR DIRECT SETTLEMENT. IT IS TO BE NOTED THAT, AS HEREINBEFORE SHOWN, CLAIMANT'S BID FOR THE COCOANUT WAS AT THE UNIT PRICE OF $0.0235, AGGREGATE PRICE $35.25, AND THAT THE NEXT LOWEST BID AT THE UNIT PRICE OF $0.20 3/4.

THE GENERAL RULE IS THAT WHERE THERE HAS BEEN A MISTAKE IN THE SUBMISSION OF A BID ON WHICH A CONTRACT IS BASED, THE CONTRACTOR MUST BEAR THE CONSEQUENCES THEREOF. IN ORDER TO AUTHORIZE RELIEF ON ACCOUNT OF A MISTAKE IN AN ACCEPTED BID IT MUST APPEAR EITHER THAT THE MISTAKE WAS MUTUAL OR THAT THE ERROR WAS SO APPARENT THAT IT MUST BE PRESUMED THE ACCEPTING OFFICER KNEW OF THE MISTAKE AND SOUGHT TO TAKE ADVANTAGE THEREOF. 26 COMP. DEC. 286; 2 COMP. GEN. 503; 3 ID. 821.

IN THE SETTLEMENT HERE UNDER REVIEW IT WAS STATED THAT IN VIEW OF THE FACT THAT THE UNIT PRICE AND THE AGGREGATE PRICE QUOTED IN THE PROPOSAL WERE IN ACCORD THERE WAS NO PATENT AMBIGUITY IN THE PROPOSAL AND THEREFORE NO EVIDENCE THAT THE CONTRACTING OFFICER, BY HIS ACCEPTANCE,INTENDED TO TAKE ADVANTAGE OF CLAIMANT'S ALLEGED MISTAKE.

IN ITS REQUEST FOR REVIEW CLAIMANT STATES THAT A CLERK IN ITS OFFICE MADE A MISTAKE IN ITS PROPOSAL BY PLACING THE UNIT PRICE FOR THE COCOANUT AT $0.0235 INSTEAD OF AT $0.235; THAT DURING THE OPENING OF THE BIDS AND IN THE PRESENCE OF OTHER BIDDERS THE ERROR IN THE UNIT PRICE AS WELL AS IN THE AGGREGATE PRICE WAS A MATTER OF COMMENT BY ALL PRESENT; THAT COCOANUT HAS NEVER BEEN PURCHASED AT SUCH A LOW FIGURE AS $0.0235; AND THAT TO ITS REQUEST MADE AT THAT TIME TO THE CONTRACTING OFFICER FOR PERMISSION TO CHANGE THE PRICE OR WITHDRAW THE BID, THAT OFFICER STATED IT COULD NOT BE DONE AND THE MATTER WOULD HAVE TO BE ADJUDGED BY THIS OFFICE.

THE MEDICAL OFFICER IN CHARGE OF THE HOSPITAL REPORTS UNDER DATE OF MARCH 16, 1927:

* * * ON MARCH 31, 1926, BIDS FROM SEVERAL FIRMS IN THE LOCALITY WERE OPENED IN THE PRESENCE OF AND READ BEFORE THE REPRESENTATIVES OF THE SEVERAL BIDDING FIRMS. ONE OF THE ITEMS APPEARING ON THE FACE OF THE PROPOSAL SHEETS WAS A REQUEST FOR BID ON 1,500 POUNDS OF COCOANUT. THE LOWEST REASONABLE BID ON THIS ITEM WAS THAT SUBMITTED BY SCHLOSS AND KAHN GROCERY CO., MONTGOMERY, ALABAMA, IN THE AMOUNT OF 20 CENTS PER POUND; HOWEVER, THERE WAS READ THE BID OF THE CAPITAL GRAIN COMPANY, WHICH WAS WRITTEN IN THE PROPOSAL SHEET UNIT PRICE COLUMN AS .0235.

THE READING OF THIS UNIT PRICE AS SUBMITTED BY THE CAPITAL GRAIN COMPANY OCCASIONED VARIOUS HUMOROUS REMARKS AND COMMENTS ON THE PART OF SEVERAL OF THE REPRESENTATIVES OF THE COMPETING FIRMS, FOR THE REASON THAT COCOANUT AT SUCH A PRICE APPEARED TO THEM AS PREPOSTEROUS.

THE FIRM SUBMITTING THE BID IMMEDIATELY ENTERED THE PLEA OF AN ERROR IN THEIR PROPOSAL AND REQUESTED TO CHANGE THE DECIMAL POINT, STATING IT WAS THEIR INTENTION TO BID .235. THIS REQUEST, HOWEVER, WAS COURTEOUSLY REFUSED, AND IT WAS EXPLAINED HOW THE MATTER COULD BE ADJUDICATED BY THE FIRM FOLLOWING DELIVERY AT THE UNIT PRICE SUBMITTED. THE FIRM ACCEPTED THE EXPLANATION WITH EQUAL COURTESY, AND FURNISHED THE SPECIFIED COCOANUT AT THE PRICE SUBMITTED, .0235.

IT THUS APPEARS FROM THE RECORD AS NOW MADE UP THAT UPON THE OPENING OF THE BIDS THE CONTRACTING OFFICER WAS PUT UPON NOTICE OF A MISTAKE IN CLAIMANT'S BID FOR THE COCOANUT, CLAIMANT HAVING AT THAT TIME STATED THE BASIS OF THE MISTAKE AND THE DISCREPANCY BETWEEN CLAIMANT'S BID PRICE AND OTHER BIDS BEING SO GREAT AS TO BE THE SUBJECT OF COMMENT BY OTHER BIDDERS THEN RESENT; THAT CLAIMANT WAS NOT PERMITTED TO WITHDRAW HIS BID, BUT THE SAME WAS ACCEPTED AND CLAIMANT UNDERTOOK TO FURNISH THE COCOANUT AT THE BID PRICE WITH THE UNDERSTANDING THAT FOLLOWING DELIVERY THE MATTER WOULD BE ADJUSTED BY THIS OFFICE; THAT PAYMENT HAS BEEN MADE BY THE BUREAU AT THE BID PRICE OF $0.0235 PER POUND; AND THAT THE CLAIM IN QUESTION IS FOR THE DIFFERENCE BETWEEN THE PRICE SO PAID AND 20 CENTS PER POUND.

UPON THE FACTS NOW APPEARING 20 CENTS PER POUND MAY BE CONSIDERED THE REASONABLE VALUE OF THE COCOANUT FURNISHED.