A-24865, JANUARY 15, 1929, 8 COMP. GEN. 362

A-24865: Jan 15, 1929

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CONTRACTS - ALLEGED MISTAKE IN BID WHERE THE PRICE STATED IN THE PROPOSAL OF THE LOWEST BIDDER FOR SUPPLIES WAS BASED ON AN ALLEGED OPTION GIVEN IT BY THE MANUFACTURER OF THE SUPPLIES. THE DIFFERENCE IN PRICES IN THE BIDS SUBMITTED WAS NOT SUFFICIENT TO PUT THE CONTRACTING OFFICER ON NOTICE THAT A MISTAKE MAY HAVE BEEN MADE. THERE IS NO AUTHORITY. AFTER AN AWARD IS MADE. THE FAILURE OF A BIDDER FOR FURNISHING SUPPLIES TO THE GOVERNMENT TO OBTAIN SUFFICIENT TIME ON ITS OPTION DOES NOT INVOLVE ANY QUESTION OF MISTAKE IN BID EVEN THOUGH THE DEALER FROM WHOM THE OPTION WAS OBTAINED MAY HAVE MADE A MISTAKE IN QUOTING THE PRICE ON WHICH THE OPTION WAS GIVEN. WHEREIN WAS DISALLOWED ITS CLAIM FOR $1.

A-24865, JANUARY 15, 1929, 8 COMP. GEN. 362

CONTRACTS - ALLEGED MISTAKE IN BID WHERE THE PRICE STATED IN THE PROPOSAL OF THE LOWEST BIDDER FOR SUPPLIES WAS BASED ON AN ALLEGED OPTION GIVEN IT BY THE MANUFACTURER OF THE SUPPLIES, AND THE DIFFERENCE IN PRICES IN THE BIDS SUBMITTED WAS NOT SUFFICIENT TO PUT THE CONTRACTING OFFICER ON NOTICE THAT A MISTAKE MAY HAVE BEEN MADE, THERE IS NO AUTHORITY, AFTER AN AWARD IS MADE, TO GRANT RELIEF TO THE CONTRACTOR ON ACCOUNT OF LOSS SUSTAINED BY REASON OF THE EXPIRATION OF THE OPTION, THERE BEING NO UNDUE DELAY ON THE PART OF THE GOVERNMENT IN ORDERING THE SUPPLIES. THE FAILURE OF A BIDDER FOR FURNISHING SUPPLIES TO THE GOVERNMENT TO OBTAIN SUFFICIENT TIME ON ITS OPTION DOES NOT INVOLVE ANY QUESTION OF MISTAKE IN BID EVEN THOUGH THE DEALER FROM WHOM THE OPTION WAS OBTAINED MAY HAVE MADE A MISTAKE IN QUOTING THE PRICE ON WHICH THE OPTION WAS GIVEN.

DECISION BY COMPTROLLER GENERAL MCCARL, JANUARY 15, 1929:

THE SUNLIGHT CHEMICAL CORPORATION REQUESTED, OCTOBER 1, 1928, REVIEW OF SETTLEMENT NO. 0194360, DATED DECEMBER 20, 1927, WHEREIN WAS DISALLOWED ITS CLAIM FOR $1,462.50, REPRESENTING THE DIFFERENCE BETWEEN THE AMOUNT CLAIMED AND THE AMOUNT PAID FOR 8,998 AND 3,500 BOTTLES OF AMMONIUM PERSULPHATE FURNISHED THE ROCK ISLAND ARSENAL, ROCK ISLAND, ILL., AND THE RARITAN ARSENAL, METUCHEN, N.J., RESPECTIVELY, UNDER TWO PROPOSALS, BOTH DATED MARCH 7, 1927.

THE FACTS ARE REPORTED TO BE AS FOLLOWS:

ON MARCH 1, 1927, THE COMMANDING OFFICER, ROCK ISLAND ARSENAL, ADVERTISED (CIRCULAR ADVERTISEMENT AND PROPOSALS NOS. 1166 AND 1167) FOR BIDS TO BE RECEIVED AT SAID OFFICE NOT LATER THAN 2 O-CLOCK P.M., MARCH 11, 1927, FOR (2) 9,000 BOTTLES AMMONIUM PERSULPHATE (IN 8-OUNCE BOTTLES) , R.I.A. SPEC. 4 R I-42, PRICE TO INCLUDE ALL CHARGES FOR DELIVERY AT ROCK ISLAND ARSENAL, AND FOR (B) 3,500 BOTTLES AMMONIUM PERSULPHATE (IN 8-OUNCE BOTTLES), R.I.A. SPEC. 4 R I-42, PRICE TO INCLUDE ALL CHARGES FOR DELIVERY AT RARITAN ARSENAL.

THE CLAIMANT'S BIDS, BOTH DATED MARCH 7, 1927, FOR FURNISHING THE SUPPLIES AT THE ROCK ISLAND ARSENAL AND RARITAN ARSENAL, RESPECTIVELY, WERE AS FOLLOWS:

CHART (A) 9,000 BOTTLES AMMONIUM PERSULPHATE (IN 8-OUNCE BOTTLES), R.I.A.

SPEC. 4 R I-42, PER BOTTLE- - - - - - - - - - - - - - - $0.1459 (B) 3,500 BOTTLES AMMONIUM PERSULPHATE (IN 8-OUNCE BOTTLES), R.I.A.

SPEC. 4 R I-42, PER BOTTLE- - - - - - - - - - - - - - - - .1309

THE FOREGOING BIDS WERE ON FORMS PREPARED BY THE WAR DEPARTMENT AND SUBMITTED TO THE BIDDER WITH ONLY THE PRICE TO BE FILLED IN BY THE BIDDER.

THE ABSTRACT OF BIDS RECEIVED AS TO ITEM (A) IS AS FOLLOWS:

TABLE

PER BOTTLE HENRY HEIL CHEMICAL CO.- - - - - - - - - - - - - - - - - - - - $0.45 J. T. BAKER CHEMICAL CO. - - - - - - - - - - - - - - - - - - - - .295 RAYMOND CO. (FOR POWDERED) - - - - - - - - - - - - - - - - - - - .292 RAYMOND CO. (FOR GRANULAR) - - - - - - - - - - - - - - - - - - - .262 SUNLIGHT CHEMICAL CORPORATION- - - - - - - - - - - - - - - - - - .1459

THE ABSTRACT OF BIDS RECEIVED AS TO ITEM (B) IS AS FOLLOWS:

TABLE

PER BOTTLE J. T. BAKER CHEMICAL CO. - - - - - - - - - - - - - - - - - - - $0.295 RAYMOND CO. (FOR POWDERED) - - - - - - - - - - - - - - - - - - .282 RAYMOND CO. (FOR GRANULATED) - - - - - - - - - - - - - - - - - - .252 SUNLIGHT CHEMICAL CORPORATION- - - - - - - - - - - - - - - - - - .1309

THE CLAIMANT WAS AWARDED THE TWO CONTRACTS, AND ON MARCH 16, 1927, WAS GIVEN TWO ORDERS, NOS. 959 AND 960, FOR THE SUPPLIES IN ACCORDANCE WITH THE RESPECTIVE PROPOSALS AND ACCEPTANCES. IT DOES NOT APPEAR THAT THERE WAS AN UNDUE DELAY ON THE PART OF THE GOVERNMENT IN ORDERING THE SUPPLIES IN VIEW OF THE OPTION UPON ITS PART TO INCREASE OR DECREASE

THE QUANTITIES 5 PERCENT.

ON MARCH 21, 1927, THE CLAIMANT ADDRESSED A LETTER TO THE COMMANDING OFFICER, ROCK ISLAND ARSENAL, AS FOLLOWS:

PLEASE REFER TO YOUR PURCHASE ORDERS NOS. 959 AND 960 OF MARCH 16, 1927. IN THESE ORDERS WE WERE AWARDED 12,500 8-OUNCE BOTTLES OF AMMONIUM PERSULPHATE. WE FIND THAT A VERY SERIOUS MISTAKE WAS MADE ON OUR FIGURES IN SUBMITTING THIS BID. WE ARE NOT MANUFACTURERS OF AMMONIUM PERSULPHATE BUT ARE WELL EQUIPPED TO REPACK THIS MATERIAL. IN FIGURING OUR COSTS ON THIS BID WE SECURED A PRICE OF 3 4/10 CENTS PER POUND ON THE AMMONIUM PERSULPHATE FROM THE ROESSLER AND HASSLACKER CHEMICAL CO. THIS WAS IN BULK IN BARRELS. TO THIS WAS ADDED THE COST OF OUR BOTTLES, CASES, LABELS, LABOR, AND OVERHEAD AND ARRIVED AT THE PRICES QUOTED YOU. WE NOW FIND THAT A MISTAKE WAS MADE IN THE FIGURES GIVEN US BY ROESSLER AND HASSLACKER AND THAT INSTEAD OF THE PRICE BEING ABOUT 3 CENTS PER POUND IT SHOULD HAVE BEEN ABOUT 30 CENTS PER POUND. THESE PEOPLE HAVE BEEN IN BUSINESS MANY YEARS AND ARE A LARGE, WEALTHY CORPORATION. WE HAD NO REASON TO DOUBT THAT THE PRICE THEY GAVE US IN A LETTER WAS NOT CORRECT. THEIR LETTER CARRYING THIS QUOTATION STATED THAT THIS PRICE WOULD HOLD UNTIL MARCH 11, WHEN YOU OPENED THE BIDS. NOW THEY REFUSE TO MAKE DELIVERY AT THIS RUINOUS PRICE BECAUSE WE DID NOT ORDER THE GOODS ON THE SAME DAY THE BID WAS OPENED.

IF WE ARE NOW FORCED TO GO ON THE OPEN MARKET AND BUY THE 6,250 POUNDS CALLED FOR WE STAND TO LOSE THE DIFFERENCE BETWEEN OUR COST FIGURES OF 3 6/10 CENTS PER POUND AND 27 CENTS PER POUND, OR 23 4/10 CENTS PER POUND, WHICH WILL EQUAL $1,462.50.

WE HAVE TELEPHONED AND TELEGRAPHED ALL OVER THIS PART OF THE COUNTRY TRYING TO GET A LOW PRICE AND THE BEST WE HAVE BEEN ABLE TO GET IS 27 CENTS PER POUND.

ON AN 8-OUNCE BOTTLE THIS WILL INCREASE OUR COST 11 7/10 CENTS PER BOTTLE. THUS OUR BID SHOULD HAVE READ $0.2629 FOR DELIVERY TO ROCK ISLAND AND $0.2479 FOR DELIVERY TO RARITAN.

WE REALIZE THAT TECHNICALLY WE ARE CONTRACTED WITH YOU AND MUST STAND THIS ENORMOUS LOSS IF YOU INSIST. WE WISH TO APPEAL, HOWEVER, TO YOUR SENSE OF FAIRNESS AND ASK THAT WE BE RELIEVED FROM THIS EMBARRASSING POSITION. WE ASK THAT YOU CANCEL OUR CONTRACT WITH YOU AND BUY ELSEWHERE OR CHANGE THE FIGURES IN THE CONTRACT TO READ $0.2629 FOR DELIVERY TO ROCK ISLAND AND $0.2479 FOR DELIVERY TO RARITAN.

WE ARE A SMALL CONCERN AND A LOSS OF $1,460 AT THE PRESENT TIME WILL BE A GREAT HARDSHIP, SO WE TRUST THAT YOU WILL SEE OUR PREDICAMENT AND BE GENEROUS ENOUGH TO HELD US.

IN REPLY TO SAID LETTER, THE COMMANDING OFFICER, ROCK ISLAND ARSENAL, BY LETTER DATED APRIL 13, 1927, ADVISED IN SUBSTANCE THAT THE REQUEST COULD NOT BE GRANTED; THAT THE SUPPLIES SHOULD BE FURNISHED; THAT THEY WOULD BE PAID FOR AT THE BID PRICE; AND THAT THE MATTER AS TO ANY RELIEF ON ACCOUNT OF THE ALLEGED MISTAKE SHOULD BE MADE THE BASIS OF A CLAIM TO BE FILED IN THIS OFFICE.

EVEN WHERE THERE IS A CLEAR CASE OF A MISTAKE IN THE SUBMISSION OF A BID, THE BIDDER MUST BEAR THE CONSEQUENCES THEREOF, UNLESS THE MISTAKE WAS MUTUAL OR THE ERROR WAS SO APPARENT AT TIME THE BID WAS ACCEPTED 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; ID. 821. THE CASE HERE SUBMITTED THERE WAS NO MISTAKE. THE CLAIMANT ACKNOWLEDGES THAT THE BIDS WERE AS INTENDED. HOWEVER, AS ITS BIDS WERE BASED UPON AN OPTION WHICH IT HAD WITH A MANUFACTURER TO FURNISH THE SUPPLIES, WHICH OPTION HELD ONLY UNTIL MARCH 11, 1927, THE DATE THE BIDS WERE OPENED, AND NOT UNTIL THE DATE THE SUPPLIES WERE ACTUALLY ORDERED, IT ALLEGES THAT IT SUFFERED A LOSS BY REASON OF THE EXPIRATION OF THE OPTION, AND NOW REQUESTS RELIEF IN PROPORTION TO THE SUM LOST, OR $1,462.50. WHILE THE PRICES QUOTED IN THE BIDS BY THE CLAIMANT WERE MUCH LOWER THAN OTHER BIDS, 58 PERCENT OF THE NEXT LOWEST, IT IS ALSO NOTED THAT THE LATTER IS 56 PERCENT OF THE HIGHEST BID. THUS, THERE WAS NOTHING IN THE BIDS, OR OTHERWISE, TO CREATE A PRESUMPTION THAT THE AWARD WAS NOT MADE INGOOD FAITH. CLEARLY, THERE WAS NO ERROR SO FAR AS THE GOVERNMENT WAS CONCERNED. FROM THE GOVERNMENT'S STANDPOINT, THERE WAS A BONA FIDE ACCEPTANCE OF AN UNAMBIGUOUS BID. THE ONLY MISTAKE APPEARS TO HAVE BEEN THAT OF THE SUBCONTRACTOR IN QUOTING A PRICE FOR THE SUPPLIES. THE CONTRACTOR'S LOSS IS THE RESULT OF ITS FAILURE TO OBTAIN A LONGER OPTION AT THE PRICE QUOTED BY THE SUBCONTRACTOR.

FROM THE FACTS APPEARING, PAYMENT IN EXCESS OF THE PRICE SET FORTH IN THE BIDS IS NOT AUTHORIZED. 20 COMP. DEC. 304; 4 COMP. GEN. 911; 5 ID. 781; 6 ID. 504, 526; A-15671, DATED OCTOBER 1, 1926; A-16327, DATED DECEMBER 14, 1926.