A-18385, JUNE 10, 1927, 6 COMP. GEN. 815

A-18385: Jun 10, 1927

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CONTRACTS - MISTAKE IN BID WHERE THE LOWEST BID FOR FURNISHING A SPECIFIED PULLEY WAS ACCEPTED IN APPARENT GOOD FAITH. WHICH WAS NOT DISCOVERED UNTIL AFTER ITS RECEIPT OF THE ORDER TO FURNISH THE PULLEY. WHEREIN WAS DISALLOWED CREDIT FOR $10. IN RESPONSE THERETO THERE WERE RECEIVED SEVEN BIDS. - 26.00 ATTACHED TO VOUCHER 22178 ARE FOUR PAPERS. INDICATING IT WAS ACCEPTED JANUARY 21. THIS WAS ENTIRELY DUE TO A STENOGRAPHIC ERROR. THE CORRECT PRICE SHOULD HAVE READ $36.00. IF THIS CAN NOT BE DONE WE ARE GOING TO REQUEST THAT YOU ENTERTAIN OUR REQUEST FOR CANCELLATION. SHOULD HAVE BEEN $36.00. IN THE SETTLEMENT CREDIT WAS DISALLOWED FOR THE AMOUNT ($10) PAID THE CONTRACTOR IN EXCESS OF THE PRICE QUOTED IN ITS ACCEPTED BID ($26).

A-18385, JUNE 10, 1927, 6 COMP. GEN. 815

CONTRACTS - MISTAKE IN BID WHERE THE LOWEST BID FOR FURNISHING A SPECIFIED PULLEY WAS ACCEPTED IN APPARENT GOOD FAITH, THE BID BEING CLEAR AND UNAMBIGUOUS ON ITS FACE, AND SHOWING, IN COMPARISON WITH THE OTHER BIDS SUBMITTED, NO SUCH DISCREPANCY AS TO PUT THE CONTRACTING OFFICER ON NOTICE THAT A MISTAKE HAD BEEN MADE IN THE PRICE QUOTED, THE ACTION SUBSEQUENTLY TAKEN BY THE CONTRACTING OFFICER, UPON BEING INFORMED BY THE CONTRACTOR THAT A MISTAKE HAD BEEN MADE IN ITS BID, WHICH WAS NOT DISCOVERED UNTIL AFTER ITS RECEIPT OF THE ORDER TO FURNISH THE PULLEY, IN ACCEPTING THE BID AS AT AN INCREASED PRICE BUT SLIGHTLY LOWER THAN THE NEXT HIGHER BID, DID NOT LEGALLY BIND THE UNITED STATES TO PAY ANY AMOUNT IN EXCESS OF THE PRICE AS ORIGINALLY QUOTED AND ACCEPTED.

DECISION BY COMPTROLLER GENERAL MCCARL, JUNE 10, 1927:

J. R. LUSBY, DISBURSING OFFICER, DISTRICT OF COLUMBIA, REQUESTED, APRIL 27, 1927, REVIEW OF SETTLEMENT 401-DC, DATED APRIL 9, 1927, WHEREIN WAS DISALLOWED CREDIT FOR $10, BEING PART OF PAYMENT OF $36 MADE ON VOUCHER 22178 TO THE JAMES WALKER CO. IN HIS ACCOUNT FOR MARCH 1926, FOR ONE CAST- IRON PULLEY PROCURED ON ORDER NO. 8284.

IT APPEARS THAT BY CIRCULAR LETTER (FORM 1407), DATED JANUARY 13, 1926, THE PURCHASING OFFICER OF THE DISTRICT OF COLUMBIA, M. C. HARGROVE, REQUESTED SUBMISSION BY 2 O-CLOCK P.M. JANUARY 19, 1926, OF BIDS FOR FURNISHING AND DELIVERING AT GARBAGE-REDUCTION PLANT, CHERRY HILL, VA., FREIGHT CHARGES COLLECT, ONE PULLEY, CAST IRON, SOLID, 42 INCHES DIAMETER BY 16 INCHES FACE BY 2 15/16 INCHES BORE, CROWN FACE, DOUBLE BELT, KEY SEAT, AND SET SCREWS. IN RESPONSE THERETO THERE WERE RECEIVED SEVEN BIDS, AS FOLLOWS:

TABLE NATIONAL ELECTRIC SUPPLY CO ---------------------------- $55.40 BARBER AND ROSS ---------------------------------------- 53.75 CHAS. BOND CO ------------------------------------------ 38.75 L. A. BENSON CO ------ ---------------------------------- 38.75 CAREY MACHINERY AND SUPPLY CO --- ----------------------- 41.55 H. W. CALDWELL AND SON CO ------------------ ------------ 36.07 JAS. WALKER CO ---------------------------------------- - 26.00

ATTACHED TO VOUCHER 22178 ARE FOUR PAPERS, AS FOLLOWS:

(1) BID OF THE JAMES WALKER CO. (REG. NO. 8284) AT $26, WHICH BEARS THE PURCHASING OFFICER'S STAMP, INDICATING IT WAS ACCEPTED JANUARY 21, 1926, AS LOWEST BID ON SPECIFICATION.

(2) LETTER ADDRESSED TO THE PURCHASING OFFICER UNDER DATE OF JANUARY 26, 1926, IN WHICH THE JAMES WALKER CO. STATES:

SUBJECT: YOUR ORDER NO. 8284

WE RECEIVED TO-DAY THE ABOVE ORDER, BEARING DATE OF JANUARY 25TH, AND IN CHECKING SAME UP WITH OUR QUOTATION WE DISCOVERED THAT WE MADE A VERY GRAVE ERROR IN QUOTING YOU A PRICE OF $26.00 NET FOR THE CAST IRON PULLEY.

THIS WAS ENTIRELY DUE TO A STENOGRAPHIC ERROR, AND THE CORRECT PRICE SHOULD HAVE READ $36.00. WE DISLIKE EXCEEDINGLY TO PLACE OURSELVES IN A POSITION WHERE WE FIND IT NECESSARY TO ACKNOWLEDGE OUR ERROR, BUT CERTAINLY WOULD APPRECIATE YOUR PERMITTING US TO FILL THIS ORDER AT THE PRICE OF $36.00, AND IF THIS CAN NOT BE DONE WE ARE GOING TO REQUEST THAT YOU ENTERTAIN OUR REQUEST FOR CANCELLATION.

THIS LETTER BEARS ON ITS FACE A NOTATION BY THE PURCHASING OFFICER AS FOLLOWS:

O.K. CONSIDER AT $36.00. M. C. H.

(3) A MEMORANDUM DATED JANUARY 29, 1926, READING: AUDITOR, D.C.:

REQ. NO. 8284

APPRO. CITY REFUSE DIV.

REQUISITION ABOVE NUMBER, FIRST ITEM:

1 PULLEY--- $26.00 JAMES WALKER.

BID IN ERROR. SHOULD HAVE BEEN $36.00.

CHANGE HAS BEEN PERMITTED. PLEASE CHANGE YOUR COPY OF REQUISITION AND PINK SHEET COPY OF ORDER ACCORDINGLY.

LETTER FROM WALKER RELATIVE TO ERROR HEREWITH. PLEASE ATTACH SAME TO THEIR BID.

M. C. H.,

PURCHASING OFFICER, D.C.

(4) COPY OF LETTER DATED JANUARY 29, 1926, IN WHICH THE PURCHASING OFFICER ADVISES THE CONTRACTOR THAT ITS QUOTATION WOULD BE CONSIDERED AS $36 AND TO BILL ACCORDINGLY.

IN THE SETTLEMENT CREDIT WAS DISALLOWED FOR THE AMOUNT ($10) PAID THE CONTRACTOR IN EXCESS OF THE PRICE QUOTED IN ITS ACCEPTED BID ($26).

IN THE REQUEST FOR REVIEW, IT IS STATED IN PART:

WHEN THE BIDS IN THIS CASE WERE OPENED, THE JAS. WALKER CO. IMMEDIATELY CALLED ATTENTION TO THE ERROR IN THEIR BID, STATING THAT IT SHOULD HAVE BEEN $36.00 INSTEAD OF $26.00, AND THAT IT WAS PURELY A STENOGRAPHIC ERROR. * * *

THE DISTRICT OF COLUMBIA IN THIS CASE WAS PUT ON NOTICE: FIRST, BY THE EXTREMELY LOW BID IN THIS CASE AND, SECOND, BY THE CONTRACTOR ACTUALLY CALLING THE ERROR TO OUR ATTENTION. TO HAVE REQUIRED THIS CONTRACTOR TO HAVE FURNISHED THIS PULLEY AT $26.00 WOULD HAVE BEEN TAKING ADVANTAGE OF HIM. AN EXAMINATION OF THE BIDS SHOWS THAT HAD THE CLAIMANT BEEN REQUIRED TO FURNISH THIS ARTICLE AT $26.00 IT WOULD HAVE BEEN AT A PRICE LESS THAN 50 PERCENT OF WHAT SOME OF THE OTHER BIDDERS ASKED. ADDING THE $10.00 TO THE $26.00 BRINGS THE BID APPROXIMATELY UP TO THE OTHER BIDS. THE $36.00, AS CAN BE SEEN, STILL MADE THIS AMOUNT THE LOW BIDDER. * * *

THE EVIDENCE OF RECORD DOES NOT BEAR OUT THE STATEMENT THAT WHEN THE BIDS WERE OPENED THE JAMES WALKER CO. IMMEDIATELY CALLED ATTENTION TO THE ALLEGED STENOGRAPHIC ERROR OF $26 FOR $36 IN ITS BID. THE BID WAS ACCEPTED JANUARY 21, 1926, AND CONTRACTOR'S LETTER HEREINBEFORE QUOTED INDICATES THAT THE ALLEGED ERROR IN ITS BID WAS NOT DISCOVERED UNTIL AFTER THE RECEIPT, JANUARY 27, 1927, OF ORDER NO. 8284, AT BALTIMORE, MD., WHEN THE ORDER WAS CHECKED UP WITH ITS UOTATION.'

THE GENERAL RULE IS THAT WHEN 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.

THERE APPEARS NOTHING IN THE INSTANT CASE FROM WHICH KNOWLEDGE ON THE PART OF THE PURCHASING OFFICER WHEN THE BID FOR $26 WAS ACCEPTED THAT A MISTAKE HAD BEEN MADE THEREIN MAY BE PRESUMED, NOR DOES A COMPARISON OF SAID BID WITH THE OTHER BIDS DISCLOSE ANY MISTAKE.

THE BID WAS CLEAR AND UNAMBIGUOUS ON ITS FACE AND WAS ACCEPTED APPARENTLY IN GOOD FAITH. THE ALLEGED MISTAKE THEREIN WAS DUE, ACCORDING TO THE CONTRACTOR'S STATEMENT, ENTIRELY TO AN ERROR ON ITS PART AND WAS NOT DISCOVERED UNTIL AFTER THE RECEIPT OF ORDER FOR THE PULLEY. THE ACTION TAKEN BY THE PURCHASING OFFICER, UPON BEING INFORMED OF THE ALLEGED MISTAKE, TO CONSIDER THE BID AS $36 INSTEAD OF $26 DID NOT LEGALLY BIND THE UNITED STATES TO PAY ANY AMOUNT IN EXCESS OF THE PRICE QUOTED IN THE ACCEPTED BID. THEREFORE PAYMENT IN EXCESS OF THE BID PRICE WAS NOT AUTHORIZED. 5 COMP. GEN. 781; ID. 946; 6 ID. 504; ID. 526; A-17944, DATED APRIL 12, 1927.